Why Kenya’s Lipa Later went under administration in 2025

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Kenya’s Lipa Later is officially gone as a going concern, and its founder, Eric Muli, is now publicly unpacking how it all unravelled. The company was placed under administration in March 2025, with Joy Vipinchandra Bhatt of Moore JVB Consulting appointed to oversee its restructuring.

Since then, there have been attempts to rescue what’s left, including interest from Canada’s Engage Capital, which reportedly tabled a $24.5 million offer, and London-based Advance Global Capital, which proposed a $5 million loan facility. In the middle of all this, Muli, now 34, has broken his silence in a May 2026 interview, laying out a mix of Covid-era repayment failures, investor pressure, currency shocks and early-stage missteps that ultimately sank the company.

To understand the scale of the fall, it helps to remember how big Lipa Later had become. Founded in 2017 when Muli was just 23, the startup grew into one of the region’s leading buy-now-pay-later players. At its peak, it had issued around $100 million in credit, served close to a million customers, employed more than 200 staff, and built a network of roughly 1,000 agents across Kenya, Rwanda, Uganda and Nigeria.

Lipa Later’s model was simple but capital-heavy: customers paid a deposit, took goods like phones or appliances, and repaid in instalments, while the company paid merchants upfront and bore the credit risk. Backed by multiple funding rounds from US VCs, it expanded aggressively, including acquiring Sky.Garden in 2021 and reaching a valuation near $100 million.

Its collapse highlights the fragility of Africa’s BNPL boom, which depends on continuous external funding. The model works in easy liquidity but breaks down when capital tightens. Rising interest rates, weaker economic conditions, and reduced investor appetite exposed these risks. Other Kenyan startups like Copia, Bonto, and Antara Health have also faced shutdowns or administration, signalling a broader correction in venture-backed models in the region.

The cracks, according to the founder, began during COVID-19 when repayment rates collapsed, with expected inflows dropping from millions of shillings to near zero. At the same time, Lipa Later borrowed in US dollars but earned in Kenyan shillings, so the weakening of the shilling from about KSh 100 to KSh 170 per dollar sharply increased its debt burden. Defaults also rose, with some customers reselling devices and abandoning repayments. Combined with investor pressure for rapid growth, the business became overstretched.

After the collapse, Muli moved on to found MRE Real Estate Limited in 2025, a property firm focused on retail and commercial projects reportedly worth around KSh 5 billion, with some former Lipa Later investors backing it. His pivot reflects a broader lesson: asset-backed businesses are easier to finance locally than high-risk BNPL lending. Meanwhile, Lipa Later remains a cautionary example of how quickly credit startups can unravel when funding tightens and macro conditions worsen.

Africa’s biggest telco has outlined its most ambitious fintech move yet. At MTN Group’s capital markets event on June 10, 2026, fintech CEO Serigne Dioum said the company wants to move from simply facilitating loans to lending directly to customers, subject to regulatory approval. MTN Group CEO Ralph Mupita also flagged Nigeria as a key market, noting that the company is pursuing additional licences to expand its financial services offering, though he didn’t specify which ones.

It marks a major shift in strategy: instead of just connecting customers to lenders, MTN wants to take on the lending risk itself and capture more of the value in the credit chain.

The numbers MTN is building toward are staggering. The company already has over 70 million active MOMO users, works with more than 2 million merchants, and supports an agent network of over 1.4 million people across Africa. In 2025 alone, MTN fintech generated roughly $2.8 billion in revenue, processed more than $500 billion in transaction value, and handled over 23 billion transactions. And yet, they see the current setup as leaving too much money on the table. More than one million people already access loans through MTN platforms every day, but those loans are booked by partner banks, not MTN. Becoming a direct lender would let the telco capture the interest income, own the customer data, and control the full credit experience. That’s a completely different business model from selling airtime.

The credit gap MTN is trying to fill is almost incomprehensibly large. Per a 2025 report by Nigeria’s National Credit Guarantee Company, nearly 80% of Nigerian MSMEs lack access to formal credit, while a Stears report estimates the sector faces a $236 billion funding gap. Nigeria isn’t the outlier but the most visible example of a continent-wide problem. Dioum noted that only 4% to 5% of adults across Africa currently have access to formal credit, leaving a massive underserved market that traditional financial institutions have consistently failed to reach. If MTN can crack this with its distribution scale — 1.4 million agents, 70 million mobile money users, telco data on spending patterns — it could reshape how tens of millions of Africans access money. Of course, it could also reshape how they get trapped in debt cycles if the product isn’t carefully designed, which is why the regulatory conversations are so critical.

MTN’s lending ambitions have been years in the making. In November 2024, its fintech arm, MoMo PSB, applied for payment licences to operate its own payment gateway and POS infrastructure in Nigeria, though those applications are still under review. The company is also awaiting regulatory approval for the separation of its Nigerian fintech business, a move that could pave the way for a standalone entity capable of raising capital and attracting investors.

The bigger prize is Africa’s rapidly growing fintech market. MTN estimates the continent’s fintech revenue pool could expand up to 13-fold over the next five years, driven largely by payments, remittances and lending. But despite the growth opportunity, more than 90% of transactions across MTN’s markets are still cash-based. That means key regulatory approvals and digital infrastructure still need to fall into place before MTN can fully execute its vision of becoming a major financial services player.