Pakistan’s B2B2C fintech AdalFi has raised $7.5 million to tackle lending challenges in the country, Reuters reported on Thursday.
The funding round was led by UAE-based COTU Ventures and Chimera Ventures, Pakistan-based Fatima Gobi Ventures and Zayn Capital, and angel investors including executives from US-based financial technology and services provider Plaid.
Co-founder and CEO of AdalFi Salman Akhtar told Reuters, “Across the board, in Pakistani banks, only 5% of deposit customers are also borrowers. So, we enable banks to tap this huge, latent customer base”.
He said 14 financial institutions in Pakistan have signed up with AdalFi, including United Bank Limited (UBL), Habib Bank Limited (HBL), and Meezan Bank, among other banks and microfinance banks operating locally. “Without our platform, banks typically take 2 weeks to process a loan request. Banks have signed up with AdalFi because we offer rigorous credit scoring to ensure portfolio quality,” he added.
He also said, “We share the downside risk of non-performing loans. Loan losses are accounted for on a pro-rata basis in the fees due to AdalFi”.
AdalFi’s proprietary technology scores financial transactional data that banks already have. Its platform then allows for customized digital marketing to qualified prospects, followed by real-time loans.
With the new funds, the startup aims to curb lead times for loan disbursements and shift loan seekers from the informal markets to its platform instead.
