Fintech company AdalFi, which is based in Pakistan, announced the attraction of initial financing for 7.5 million dollars.
The funding round was led by Cotu Ventures, Chimera Ventures, Fatima Gobi Ventures, and Zayn Capital. The company stated that it intends to use the funds received to take measures to correct the situation in the Pakistani lending market, which is currently experiencing a difficult period. The firm notes that due to the lack of a reliable credit rating, banks are forced to manually conduct numerous customer checks.
AdalFi provides credit scoring and underwriting models based on artificial intelligence. The company also offers customers a critical infrastructure for providing intelligent instant loans to consumers and small and medium-sized enterprises. This line of offerings includes unsecured credit products such as term loans, credit cards, and renewable financial instruments for consumers and SMEs, respectively.
Within two years, AdalFi has registered 14 banks. The company has also increased lending volumes by 30% monthly over the past 19 months.
AdalFi operates on an income distribution model. This model takes into account any downside risks for banks. The result of applying such a solution is that all loan losses are proportionally accounted for in commissions.
Salman Akhtar, CEO and co-founder of AdalFi, says that there are 50 million bank accounts in Pakistan, but only two million of these individuals and businesses have any kind of credit relationship with their bank.
The high cost of providing a loan due to physical verification of identity, assets, and financial condition makes it difficult for a wide range of customers to access finances.
The digital lending platform developed by AdalFi allows partner banks to instantly assess the creditworthiness of customers who have never been granted loans and cross-sell loans to them.
As we have reported earlier, Pakistan is set to introduce national digital ID wallet.