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Last update: 11 november 2023
EduFi, a fintech startup, has obtained $6.1 million in funding to assist financially disadvantaged students in Pakistan. The investment comes from various sources, including Zayn VC, Palm Drive Capital, Deem Ventures, Q Business, and individual angel investors. EduFi, based in Singapore, has introduced an AI-powered "study now, pay later" lending platform and mobile app in Pakistan, where traditional student loan products are scarce. Instead, students often resort to high-interest personal loans with complex application processes.
The startup's mission is to tackle two pressing issues in Pakistan: high poverty rates and low literacy rates. Private schools are favored over poorly performing public schools, resulting in annual expenditures of over $14 billion on education in Pakistan. Moreover, more than half of Pakistan's adult population lacks access to basic financial services like bank accounts and insurance. Aleena Nadeem, EduFi's founder and CEO, holds an MIT degree and has prior experience at Goldman Sachs and Ventura Capital. She witnessed these challenges firsthand while working with the nonprofit Progressive Education Network (PEN) in Pakistan.
EduFi has already formed partnerships with 15 universities, granting access to their app for approximately 200,000 students across Pakistan. The platform requires applicants to submit financial information, such as bank statements or proof of income, to assess their eligibility for loans. Once approved, EduFi disburses the funds directly to the university's bank account. EduFi has undergone an 18-month beta phase, during which they tested their credit model against 80,000 consumer finance loans issued by traditional banks. They claim their credit scoring system allows them to process student loans within 48 hours of application, revolutionizing the lending process.