Singapore-based EduFi, a financial technology startup dedicated to helping financially disadvantaged students, has raised a massive $6.1 million in pre-seed funding. With headquarters in Singapore, EduFi has also launched a mobile application and an advanced “study now, pay later” lending platform, driven by artificial intelligence, in Pakistan. This aims to provide access to student loans in a country where there are no conventional student loan products.
EduFi’s founder and CEO, Aleena Nadeem, emphasized the challenges facing students in Pakistan, where they often rely on tedious application processes and high-interest personal loans due to the absence of traditional student loan products. The company is committed to addressing extreme poverty and poor literacy in Pakistan. Notably, it is revealed that private schools enroll 40% of children due to issues with public school quality, resulting in a cost of $14 billion annually. Additionally, over half of Pakistan’s adult population lacks access to financial services, including bank accounts and insurance.
Aleena Nadeem, who is a graduate of MIT with previous experience at Goldman Sachs and Ventura Capital, aims to bridge the gap in Pakistan’s education system through EduFi. He noted that while many children in Pakistan make it to high school, there is a significant drop in those who are able to attend higher education institutes. This is where EduFi aims to provide assistance by injecting capital to support students during this transition phase.
Furthermore, EduFi’s mobile app offers financial help for undergraduate, master’s, and doctoral programs, providing access to around 200,000 students across Pakistan through partnerships with 15 universities. The platform utilizes a credit scoring algorithm to approve and disburse student loans within 48 hours, requiring financial documentation for the loan application process.
Despite facing a 60% decrease in quarterly operating profit, EduFi has already obtained authorization from the Securities and Exchange Commission of Pakistan for a lending license. The company anticipates the official issuance of the license in November, with plans to expand its reach, enhance the platform, explore surrounding markets, and introduce new fintech products like student credit cards, utilizing the pre-seed funding.
Having garnered support from investors such as Zayn VC, Palm Drive Capital, Deem Ventures, and angel investors, EduFi’s mission to improve financial inclusion in Pakistan has received significant backing. Faisal Aftab, general partner and founder of Zayn VC, highlighted the impact of EduFi’s AI-driven platform in promoting financial inclusion for families in lower and middle-income brackets.
EduFi’s recent accomplishment demonstrates a commitment to improving literacy and credit penetration in Pakistan and beyond. With the promising future ahead, founder Aleena Nadeem emphasized that the fundraiser marks just the beginning of the digital platform’s impact.
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