Kenyan Buy-Now-Pay-Later Giant Enters Administration
Kenya's Lipa Later, one of East Africa's largest buy-now-pay-later platforms, officially entered administration in March 2025 after a dramatic fall from its position as a regional fintech leader. The company, which had issued approximately $100 million in credit and served close to one million customers at its peak, was placed under the oversight of Joy Vipinchandra Bhatt from Moore JVB Consulting.
Founder Eric Muli, now 34, broke his silence in a May 2026 interview, revealing the complex factors that led to the startup's collapse. The company attracted rescue attempts from international investors, including a $24.5 million offer from Canada's Engage Capital and a $5 million loan facility proposal from London-based Advance Global Capital.
From Regional Success to Financial Collapse
Founded in 2017 when Muli was just 23 years old, Lipa Later grew rapidly to become one of the region's leading buy-now-pay-later players. The startup operated a capital-intensive model where customers paid deposits for goods like phones and appliances, then repaid in installments while the company paid merchants upfront and absorbed credit risk.
The company expanded aggressively through multiple US venture capital funding rounds, acquiring Sky.Garden in 2021 and reaching a valuation near $100 million. However, this growth trajectory masked underlying vulnerabilities that would prove fatal during economic turbulence.
Perfect Storm of Challenges
According to Muli's account, the company's troubles began during the COVID-19 pandemic when repayment rates collapsed dramatically. Expected cash inflows dropped from millions of Kenyan shillings to nearly zero as customers struggled with economic hardship.
The weakening of the shilling from about KSh 100 to KSh 170 per dollar sharply increased the company's debt burden, as Lipa Later had borrowed in US dollars but earned in Kenyan shillings.
Currency volatility compounded the crisis. Defaults increased as some customers resold devices and abandoned repayment obligations entirely. The combination of investor pressure for rapid growth and deteriorating market conditions left the business severely overstretched.
Broader Industry Implications
The Lipa Later failure signals a broader correction affecting venture-backed models across Kenya's tech ecosystem. Other prominent Kenyan startups including Copia, Bonto, and Antara Health have also faced shutdowns or entered administration, reflecting challenges in sustaining high-growth business models during economic uncertainty.
The buy-now-pay-later model, while successful during periods of easy liquidity, proved vulnerable when capital tightened. Rising interest rates, weaker economic conditions, and reduced investor appetite exposed fundamental risks in businesses dependent on external funding for working capital.
As Kenya's fintech sector continues evolving, Lipa Later's collapse serves as a cautionary tale about sustainable growth versus aggressive expansion in emerging markets. The company's journey from a promising startup to administration underscores the importance of building resilient financial models that can weather economic storms while serving Africa's growing digital commerce needs.