AdalFi, Pakistan’s end-to-end digital lending infrastructure provider, has secured $7.5M in funding to help banks in the country to ramp up consumer and business loans.
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FinTech startup AdalFi has secured $7.5M in a funding round led by COTU Ventures, Chimera Ventures, Fatima Gobi Ventures, and Zayn Capital alongside angel investors. Launched in 2021, AdalFi helps banks offer their customers real-time loan products.
The Pakistani VC ecosystem rose to new heights in 2021 when it raised $333M in funding, recording a year-on-year growth of over 300% compared to 2020. While the country did not surpass its 2021 funding levels last year, its top industry, FinTech, recorded significant growth, as seen in our FREE 2023 Emerging Venture Markets Investment Report. FinTech raised over $80M in funding capturing 27% of the total funding share and 21% of the deal share. The country has immense potential for financial technology as a large part of the population is underbanked or unbanked. Consequently, we saw notable funding in 2022 closed by digital banking and digital wallet platforms including the likes of Dbank, NayaPay, and SadaPay which collectively raised over $40M during the year.
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With AI-powered credit scoring and underwriting models, AdalFi has built the critical infrastructure 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. Salman Akhtar, CEO and co-Founder of AdalFi commented: “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.”
AdalFi’s proprietary technology scores the financial transactional data already possessed by banks, enables personalized digital marketing to qualified prospects and, finally, provides the customer journeys which are embedded within the bank’s digital presence to enable real-time disbursement of loans. Salman Akhtar added: “In essence, we have built better underwriting models for banks. Not only have we lowered the cost of credit scoring and underwriting and therefore the cost of credit but we changed their outlook and got them to change their approach. Banks have been drawn to AdalFi because we offer rigorous credit scoring to ensure portfolio quality with zero cost customer conversion (from depositors to borrowers). Moreover, we enable a breakthrough in customer experience with instant, smart loans which completely transform customer value delivery.”
The company will utilize the funding for its aim to be the premier digital lending solutions provider in the APAC region and beyond. “Salman excited us from our first interaction. Him and his team’s level of experience and track record building software for financial institutions is a rarity in this space. When you combine that with the innovative solution that AdalFi offers, specifically with its AI-powered scoring model that is scalable and frictionless, you have all the ingredients to massively transform the credit industry. The fact that they have already secured partnerships with the leading banks in the country, and have already facilitated new unsecured lending channels for their clients in such a short space of time, gives us confidence that they have an incredibly exciting future ahead of them.” concluded Amir Farha, Managing Partner at COTU Ventures.
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