It is the first major corporate funding announcement since the start of the year as Pakistan deals with a deepening economic crisis and political instability. The official press release said that the company aims to promote financial inclusion by providing people as well as small and medium enterprises access to credit. It said that AdalFi aspires to fix Pakistan’s “broken” loans market, which currently relies on banks performing multiple manual tasks in the absence of any reliable credit scoring data.
The funding round was led by Cotu Ventures, Chimera Ventures, Fatima Gobi Ventures, Zayn Capital, Angel investors, and Execs from Plaid.
Moreover, AdalFi fintech provides AI-powered credit scoring and underwriting models, alongside the critical infrastructure to power smart, instant loans for consumers and small and medium-sized enterprises (SMEs). Similarly, the company also offers term loans, credit cards, and revolving finance facilities for consumers and SMEs.
The company has signed up 14 banks within two years, including United Bank Limited (UBL), Habib Bank Limited (HBL), Meezan Bank, and other microfinance banks operating in the country. Likewise, its loan volume has grown almost 30% month on month for the last 19 months.
Salman Akhtar, the CEO of the company said;
“Our rapid growth is a testament to the need for such solutions in the lending space, and we look forward to continuing to drive positive change in the industry”
Furthermore, AdalFi operates on a revenue-sharing model which captures any downside risk exposure to banks such as loan losses. It scores the financial transactional data already possessed by banks, enables personalized digital marketing to qualified prospects, and provides the customer journeys which are embedded within the bank’s digital presence to enable real-time disbursement of loans.
Read more: Pakistani startups raise over $200 Million
The company’s official press release said;
“AdalFi operates on an asset-light, the revenue-sharing model with banks which captures any downside risk exposure to banks such that any loan losses are accounted for, pro-rata, in fees due to AdalFi. These deep partnerships ensure banks and AdalFi are completely aligned in that AdalFi only makes money from loans that are actually paid back”
The startup was founded in July 2021 and has enabled a cumulative amount of Rs1 billion in GLV through December. Since its launch, almost 70,000 loans have been disbursed with a nearly 0% default rate. Moreover, in January 2023 the company generated Rs 390 million in lending and seeks to exceed Rs 1 billion in the first quarter of year 2023.