AdalFi, a Pakistan-based fintech providing credit scoring data and lending technology to banks, has raised $7.5 million in Seed funding.
The funding round was led by Cotu Ventures, Chimera Ventures, Fatima Gobi Ventures and Zayn Capital alongside angel investors including execs from Plaid.
AdalFi says it's ambition is to fix Pakistan's "broken" loans market, which currently relies on banks performing multiple manual checks on customers in the absence of any reliable credit scoring data.
The AdalFi tech stack provides AI-powered credit scoring and underwriting models, alongside the critical infrastructure to power smart, instant loans for consumers and SMEs. These include unsecured loan products such as term loans, credit cards and revolving finance facilities for consumers and SMEs respectively.
Within two years, AdalFi has signed up 14 banks - including seven out of the top ten - and grown loan volumes by 30% month on month for the last 19 months.
AdalFi operates on a revenue sharing model which captures any downside risk exposure to banks such that any loan losses are accounted for, pro-rata, in fees due to AdalFi.
Salman Akhtar, CEO and co-founder of AdalFi comments: “Pakistan has 50 million bank accounts yet only two million of these individuals and businesses have any credit relationship with their bank. The high cost of loan origination driven by physical verification of identity, assets and financial health (in the absence of credit scoring) has restricted credit access to a thin, top tier of customers. AdalFi’s digital lending platform allows partner banks to instantly credit score the other 95% of their existing customers who have never been lent to and cross-sell loans to them.”