KARACHI: Pakistani digital lending platform AdalFi said on Thursday it has raised $7.5 million in funding, the first major corporate financing announcement in the South Asian country this year as it grapples with a deepening economic crisis.
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, AdalFi said in a statement.
As the country’s financial woes have deepened, Magnitts Emerging Venture Markets Report estimated Pakistani startups were only able to raise $315 million in 2022, down 5pc decline from the record high $333m in 2021.
AdalFis proprietary technology scores the financial transactional data already possessed by banks. The B2B2C fintech then enables personalised digital marketing to qualified prospects and then provides real-time loans.
According to a survey by the non-profit Karandaaz, only 30 per cent of adults in Pakistan have access to formal banking services and mobile wallets, making the country largely unbanked with limited access to credit. Across the board, in Pakistani banks, only 5pc of deposit customers are also borrowers. So, we enable banks to tap this huge, latent customer base, Salman Akhtar, co-founder and CEO of AdalFi, told Reuters.
Akhtar pointed to a study by the State Bank that found long lead times for loan disbursements as one factor behind consumers turning to informal credit markets instead.
Without our platform, banks typically take 2 weeks to process a loan request.
He said 14 financial institutions in Pakistan have signed up with AdalFi, including UBL, HBL, Meezan Bank, among other banks and microfinance banks operating in the country.
Published in Dawn, February 17th, 2023
