AdalFi, a Lahore-based fintech building a credit-scoring platform for digital lending, has raised $7.5 million in seed funding from COTU Ventures, Chimera Ventures, Fatima Gobi Ventures, and Zayn Capital.
Make me care: Getting access to credit is not easy in the country.
Pakistan has approximately 82 million bank accounts. But only 2 million of those bank accounts have a credit relationship with the bank.
The reason for this is the high cost of loan origination, which requires physical verification of assets and, in most cases, collateral. Consumers that get credit most often don’t need it. Ones that need it don’t qualify using traditional methods.
But in a cash-based economy, one’s ability to repay a loan shouldn’t be determined by financial health or assets. And AdalFi believes it can help.
Tell me more: With AdalFi’s proprietary credit scoring engine, banks, and other financial institutions can reach previously underserved customers and extend them credit.
Behind the scenes, it analyzes financial transaction data that the banks possess to identify creditworthy customers. Once identified, it extends credit in real time.
AdalFi allows banks to offer consumers and small businesses unsecured loan products like credit cards, salary advances, and short-term loans.
It makes money when loans are repaid. This alignment of incentives allows banks to lend confidently and encourage depositors to become borrowers.
AdalFi claims to have:
- Integration with 14 banks.
- Gross Loan Volume (GLV): 30% MoM growth for the last 19 months.
- 70,000 loans disbursed.
- 0.1% default rate.
You should know: AdalFi started in 2021 and is a product of Techlogix, a global IT services, consulting, and business solutions company founded by Salman Akhtar in 1996.
Zoom out: AdalFi plans to invest in its tech stack and partner with financial institutions to continue investing in the company’s growth.