Lipa Later, a Kenyan digital consumer credit provider, has been placed under administration, with Joy Vipinchandra Bhatt of Moore JVB Consulting appointed as administrator effective March 24, 2025.
This move transferred control of the company’s operations and assets to Bhatt, effectively ousting the previous management.
This development follows a period of financial instability for Lipa Later, despite a recent KSh 1.36 billion ($9.88 million) funding round intended for African expansion. Reports indicate months of unpaid employee salaries, outstanding supplier invoices, and escalating legal disputes.
Key legal challenges include a lawsuit filed by Africa Foresight Group (AFG) for unpaid consultancy fees, which Lipa Later lost despite claiming substandard work. The Kenyan High Court ruled against Lipa Later, citing internal emails acknowledging the debt. Additionally, Lipa Later faced accusations of trade secret misappropriation by a former employee who joined competitor Craft Silicon Kenya.
The company’s acquisition of the struggling eCommerce platform Sky.Garden for KSh 250 million ($1.9 million) in December 2023 further strained its finances, raising questions about its financial management.
Bhatt’s immediate task is to assess Lipa Later’s viability, with creditors required to submit claims by April 23, 2025. Potential outcomes include restructuring, asset sale, or liquidation.
Odyssey Capital Also Under Administration
Simultaneously, Odyssey Capital, a digital lending firm, has also entered administration, highlighting systemic risks within Kenya’s fintech sector.
The Insolvency Act 2015 triggered these administration proceedings, resulting in:
- Transfer of operational control to administrators.
- Cessation of independent financial decisions by company directors.
- A deadline of April 23, 2025, for creditors to file claims.
The insolvency of these major Buy Now, Pay Later (BNPL) and digital lending players raises significant concerns for consumers, merchants, and investors.
READ
Impact on the Fintech Ecosystem
- Disruptions in BNPL Services: Retailers and consumers face uncertainty regarding instalment payments and pending purchases. Competitors may capitalize on the market gap.
- Reduced SME Financing: SMEs and microfinance borrowers may experience limited credit access and stricter lending terms.
- Investor Confidence at Risk: Venture capital investment in Kenyan fintech startups may decline, with increased emphasis on profitability and potential market exits.
- Potential Regulatory Changes: The Central Bank of Kenya (CBK) and the Competition Authority of Kenya may introduce stricter licensing requirements, consumer protection measures, and debt collection oversight.