AdalFi, a Pakistan-based digital lending infrastructure provider, has raised $7.5m in seed funding to tackle the lending challenges in the country.
The round was led by COTU Ventures, Chimera Ventures, Fatima Gobi Ventures and Zayn Capital alongside angel investors including execs from Plaid.
According to AdalFi, less than 4% of Pakistani consumers and businesses take bank loans. The company uses AI-powered credit scoring and underwriting models to power smart, instant loans for consumers and SMEs in Pakistan.
These include unsecured loan products such as term loans, credit cards and revolving finance facilities for consumers and SMEs respectively.
The AdalFi tech stack also includes pre-built, bespoke customer journeys and integrations with major banking platforms. AdalFi has quickly signed up 14 banks (including 7 out of the top 10), on its mission to promote financial inclusion as it unlocks access to credit to millions of people and small businesses.
The company’s proprietary technology scores the financial transaction data already possessed by banks, enables personalised digital marketing to qualified prospects and provides the customer journeys embedded within the bank’s digital presence to enable teal-time disbursement of loans.
Salman Akhtar, CEO and co-founder of AdalFi, said, “Pakistan has 50 million bank accounts yet only 2 million of these individuals and businesses have any credit relationship with their bank.
“The high cost of loan origination driven by physical verification of identity, assets and financial health (in the absence of credit scoring) has restricted credit access to a thin, top tier of customers. AdalFi’s digital lending platform allows partner banks to instantly credit score the other 95% of their existing customers who have never been lent to and cross-sell loans to them.”
Toward the end of last year, FinTech Global Research reported that FinTech deal activity in Pakistan was expected to drop 16% over the course of 2022.
Pakistani FinTech deal activity reached 24 deals from Q1-Q3 2022 and is on track to decrease 16% based on activity in the first three quarters of 2022. Investment in the country reached $82.4m from Q1-Q3 2022, a 14% drop from 2021 levels.
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