Lipa Later

In Kenya's dynamic digital finance landscape, companies offering swift access to credit have become commonplace. Among these, Lipa Later carved a significant niche, particularly in the Buy-Now-Pay-Later (BNPL) sector. This detailed profile, crafted for Kenyan consumers and small businesses, examines Lipa Later’s offerings, operational specifics, and crucial market standing, including its recent entry into administration.

Company Overview and Background in Kenya

Lipa Later Limited, a Nairobi-based private limited company, emerged in 2018 as a prominent fintech player. Co-founded by Eric Muli and Michael Maina, the company quickly scaled, attracting over $16 million in funding from various investors including Cauris and Lateral Frontiers. Its core business model revolved around providing flexible payment solutions, primarily through BNPL, allowing consumers to purchase electronics, appliances, and other goods through manageable instalments.

While successful in its growth trajectory, expanding into Uganda, Rwanda, and Nigeria, Lipa Later faced significant challenges. In March 2025, the company entered administration, a process initiated by the Kenyan High Court due to insolvency, stemming from funding shortfalls and a rise in loan defaults. This development, overseen by an administrator from Moore JVB Consulting LLP, signals a period of restructuring and has profound implications for its services and customer base.

Loan Products and Services

Lipa Later's primary offering has been its Consumer Buy-Now-Pay-Later (BNPL) Loans. This service enables shoppers to acquire goods, such as mobile phones, furniture, and electronics, from partner retailers. The payment is then spread over several months, often with an initial zero-deposit option. These instalment plans typically range from 3 to 12 months. The purchase itself often serves as a form of collateral for these unsecured consumer loans.

Historically, Lipa Later also explored Merchant Financing solutions, including working-capital loans and invoice factoring for Small and Medium-sized Enterprises (SMEs). However, public details on these business-focused products were less prominent, and their status post-administration remains uncertain.

• Consumer BNPL Loans: Instalment plans for goods purchased at partner merchants.
• Loan Amounts (Consumer): Typically range from KES 1,000 to KES 150,000.
• Loan Tenors (Consumer): 3 to 12 months, repaid in equal monthly instalments.

Interest Rates, Fees, and Terms

Understanding the cost of borrowing is paramount. For its BNPL instalment plans, Lipa Later's reported interest rates varied:

• Monthly Interest Rate: 0% to 3% per month.
• Annual Percentage Rate (APR): This translates to approximately 12% to 36% APR, depending on the loan tenor and the borrower's risk profile. It is crucial for borrowers to confirm their specific rate at the point of application.

Beyond interest, other charges might apply:

• Origination and Processing Fees: These typically ranged from 1% to 3% of the loan amount.
• Late Payment Fees: For overdue instalments, a charge of KES 500 to KES 1,000, or 5% of the overdue amount, was commonly applied. These fees can quickly accumulate, increasing the overall cost of the loan.
• Early Repayment Penalty: No penalties for early repayment have been publicly reported, offering some flexibility for borrowers who wish to clear their outstanding balance ahead of schedule.

Given the current administration status, borrowers should seek absolute clarity on all applicable charges and repayment terms directly from the company or the administrator before committing to any new or existing payment plans.

Application Process, Mobile App, and Regulatory Status

Lipa Later aimed for a streamlined and accessible application process, largely leveraging digital platforms and in-store integrations.

Application Process and Requirements

Applying for a Lipa Later BNPL loan was designed to be quick and straightforward:

• Mobile App: Users could download the Lipa Later app (available on both iOS and Android), sign up, undergo a credit check, and receive an instant credit limit.
• In-Store: At partner merchant outlets, customers could apply through the point-of-sale system, where a cashier would enter their phone number and identification details.
• Website: Some online merchants integrated a Lipa Later check-out plug-in for direct online applications.

The Know Your Customer (KYC) and onboarding process was largely digital, requiring a mobile number, national identification number, and a selfie for automated verification. This typically took less than five minutes for consumer BNPL applications. Credit scoring was conducted using a proprietary algorithm that analysed mobile-money transaction history, device ownership, and social and e-commerce behaviour.

Mobile App Features and User Experience

The Lipa Later mobile application served as a central hub for users. Key features included:

• Checking available credit limits.
• Viewing purchase history and repayment schedules.
• Accessing a support chat for queries.

User reviews on platforms like Google Play and Apple App Store provided a mixed picture. While many appreciated the app's ease of use and instant credit limit approvals, common complaints included occasional app downtime, concerns over opaque late fees, and aggressive SMS reminders for repayments. Customer service, accessed via in-app chat or call centre, received fair ratings from a majority of respondents.

Regulatory Status and Licensing

Lipa Later Limited obtained its license as a Digital Credit Provider from the Central Bank of Kenya (CBK) on March 6, 2024. This placed it under the CBK's supervision, ensuring adherence to regulations concerning pricing, KYC procedures, data protection, and caps on interest and fees under the Non-Deposit Taking Credit Providers regime. The company was also expected to comply with the Kenya Data Protection Act (2019) regarding user data handling.

However, the company's entry into administration on March 24, 2025, under the Insolvency Act 2015, represents a significant regulatory action. While it was licensed, its financial difficulties led to this court-mandated process. This situation highlights that licensing provides oversight but does not guarantee a company's financial stability.

Market Position, Competition, and Practical Advice for Borrowers

Lipa Later once held a strong position in Kenya's BNPL market, but recent events have altered its standing. Understanding this context is vital for current and prospective borrowers.

Market Position and Competition in Kenya

Prior to its administration, Lipa Later was among the top five BNPL providers in Kenya, actively competing with other established players and emerging fintechs. Its main rivals included:

• Safaricom's Fuliza and Najua Later: Offering short-term overdrafts and device financing.
• Aspira: Another prominent BNPL provider in Kenya.
• Payflex (South Africa) and CredPal (Nigeria): Regional players with varying degrees of presence or influence.

Lipa Later differentiated itself through extensive merchant partnerships, boasting over 500 outlets in Kenya and partnerships with entities like Telkom Kenya for device financing. Its planned expansion into merchant banking and invoice factoring also aimed to broaden its market appeal. The recent bid by Engage Capital for $24.5 million in May 2025 suggests a potential path to recovery or restructuring, but the outcome remains uncertain.

Customer Reviews and Common Complaints

Customer feedback for Lipa Later often highlighted the convenience of its service, particularly the ease of application and the ability to acquire goods with zero upfront deposit. However, recurring negative feedback pointed to:

• Opaque or unclear communication regarding late payment fees.
• Aggressive debt collection tactics, including frequent SMS reminders.
• Difficulties in reaching customer service for dispute resolution, especially concerning fee discrepancies or delays in processing refunds.

These points underscore the importance of thoroughly understanding terms and conditions before committing to a loan.

Practical Advice for Potential Borrowers

Given Lipa Later's current status under administration, potential and existing borrowers in Kenya must exercise extreme caution and diligence:

1. Verify Service Availability: Before considering any new services, confirm if Lipa Later is still actively onboarding new customers or processing new loans under its current administration. Services might be significantly curtailed or suspended.
2. Understand Repayment Obligations: If you have an existing loan, your repayment obligations remain. Contact the administrator, Joy Vipinchandra Bhatt of Moore JVB Consulting LLP, or Lipa Later's designated contact channels to confirm who to pay, how to pay, and any changes to your loan terms. Do not assume your debt is cancelled.
3. Review All Terms Meticulously: If any services are still offered, demand complete clarity on all interest rates, processing fees, late payment penalties, and the total cost of the loan. Ensure these are documented.
4. Beware of Third-Party Communication: With companies in administration, there can be confusion. Only interact with official communication channels from Lipa Later or its appointed administrator. Be wary of unverified calls or messages.
5. Consider Alternatives: Due to the company's instability, it might be prudent to explore other licensed digital credit providers in Kenya. Compare their terms, interest rates, and customer reviews carefully. Look for providers with a strong, stable financial history.
6. Keep Records: Maintain thorough records of all transactions, communications, and payment confirmations related to your Lipa Later account. This documentation will be crucial should any disputes arise.
7. Seek Financial Counsel: If you are unsure about your rights or obligations, particularly with an existing loan, consider consulting a financial advisor or a legal professional specializing in consumer credit in Kenya.

While Lipa Later played a role in expanding access to digital credit in Kenya, its current administrative status serves as a stark reminder of the inherent risks in the fintech sector. Borrowers must always prioritize due diligence and financial literacy to navigate these services safely.