In a surprising move, Lipa Later, a once-promising Kenyan BNPL startup, attempted to secure a $5 million loan from UK lender Advanced Global Capital (AGC) in April 2025. The move came just two weeks after the company had entered administration, raising immediate questions about legal authority and financial governance.
By March 2025, Lipa Later was deep in financial distress. Mounting payroll arrears, missed supplier payments, and a failed fundraising campaign had forced the company to surrender control. The Kenyan courts appointed Joy Vipinchandra Bhatt of Moore JVB Consulting as administrator on March 24, 2025, transferring all operational authority from the company’s directors to her.
Despite this, documents revealed that Lipa Later’s former management team submitted a formal loan application to AGC shortly after administration began. The timing and content of this application triggered concerns about its legality and alignment with Kenyan insolvency laws.
Details of the Proposed Lipa Later Loan
The proposed loan sought to use invoice factoring to bridge immediate cash shortfalls. The terms were substantial:
- Amount: Initial commitment of $3 million, extendable to $5 million after 12 months
- Interest Rate: 14% annually
- Repayment: Interest-only for 24 months, with quarterly repayments starting in month 27
- Term: 36 months
- Conditions: AGC would control co-managed bank accounts and all receivables. Lipa Later could not acquire additional debt without AGC’s approval
- Jurisdiction: The deal would fall under English law
These terms reflected AGC’s cautious approach, particularly its emphasis on strict financial controls. Still, the absence of any documented administrator sign-off casts doubt on whether the loan had legitimate backing.
“The administrator’s silence on the loan raises concerns over its enforceability under Kenyan insolvency rules,” said one legal analyst following the case.
Did the Administrator Approve the Loan?
Under Kenya’s Insolvency Act, once a company enters administration, all significant decisions must be routed through the administrator. This includes any financing activity or external borrowing.
To date, there is no public confirmation that Joy Vipinchandra Bhatt—the appointed administrator—approved or was even aware of the loan request.
While co-founder Eric Muli acknowledged the existence of the loan proposal, he refused to provide further details, citing pending court matters. This response adds more uncertainty to an already opaque process.
Multiple Bidders Circle a Distressed BNPL Player
Even as Lipa Later explored emergency financing, several entities expressed interest in acquiring or investing in the business. These include:
- Engage Capital, a Nairobi-based VC firm, offered $24.5 million for a partial acquisition. Their deal includes Lipa Later’s platform, customer data, performing loan book, and regional IP—excluding bad debts
- A Nairobi consultancy firm submitted a separate bid reportedly worth KES 2.5 billion (~$19 million) for a full acquisition
- The AGC loan offer, though not an acquisition, was a capital injection tied specifically to Lipa Later’s invoice receivables, rather than a complete balance sheet restructure
Why This Matters for the BNPL Industry
The Lipa Later loan case is more than just a failed startup grasping at last-minute financing. It underscores the fragility of Africa’s BNPL market, where growth has often outpaced compliance and capital reserves.
Moreover, the case highlights critical gaps in corporate governance. That a company under administration could pursue a multimillion-dollar foreign loan without public records of administrator approval sets a troubling precedent.
The situation also reveals a bifurcation in investor confidence—with some seeing salvageable value in Lipa Later’s tech and customer base, while others remain wary of the risks posed by poor governance and an unsustainable lending model.
Quick Facts: Lipa Later Loan Timeline
| Date | Event |
|---|---|
| March 24, 2025 | Lipa Later enters administration under Joy Vipinchandra Bhatt |
| Early April 2025 | Loan request submitted to AGC |
| Mid-April 2025 | AGC reviews term sheet; conditions include tight cashflow oversight |
| July 2025 | Competing bids emerge from Engage Capital and others |
Conclusion: A Cautionary Tale in Fintech Governance
The lipa later loan saga paints a stark picture of what happens when governance, timing, and legal compliance collide during financial crisis. While the startup may still attract a viable acquisition or turnaround opportunity, the incident offers a lesson for Africa’s fintech leaders: financial innovation must be backed by legal clarity, transparency, and responsible management.
