Pre-seed funding for EduFi, a fintech startup headquartered in Singapore that assists economically disadvantaged students, has totaled $6.1 million.

EduFi has launched a mobile application and an artificial intelligence-driven "study now, pay later" (SNPL) lending platform in Pakistan, a country with no conventional student loan products.

In contrast, individuals rely on protracted application processes and high-interest personal loans, according to  Aleena Nadeem, the founder and CEO of EduFi.

The fintech company aims to alleviate extreme poverty and poor literacy in Pakistan. Private schools register 40% of kids due to public school quality issues, costing $14 billion annually. Furthermore, more than half of Pakistan's adult population lacks access to financial services, including bank accounts and insurance.

Bridging Gaps in Pakistan's Education System

Nadeem, a graduate of MIT with prior work experience at Goldman Sachs and Ventura Capital, observed numerous children grappling with financial hardships during his tenure at the Progressive Education Network (PEN) in Pakistan. PEN is a non-profit organization that endeavors to furnish adequate and complimentary education to disadvantaged children.

"Many children in Pakistan make it to high school, but there is a sharp drop in those who are able to achieve a higher college education. This drop is where EduFi is trying to inject capital into the gap between high school graduation and first-year university admission,"  Aleena Nadeem elaborated, as quoted by TechCrunch.

EduFi's app, which offers financial assistance for undergraduate, master's, and doctoral programs, is accessible to an estimated 200,000 students throughout Pakistan, due to its established collaborations with 15 universities.

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Notably, the digital platform requires financial documentation, including bank statements or a sustainable source of income to cover loan repayments, to facilitate loan applications through the application app. This firm says its credit scoring algorithm approves and disburses student loans within 48 hours, according to Forbes.

Utilizing Technology to Promote Inclusion

EduFi, which has obtained authorization from the Securities and Exchange Commission of Pakistan (SECP) for a lending license notwithstanding a 60% decrease in quarterly operating profit, is currently anticipating the official issuance of the license in November. The pre-seed funding will be used to increase reach, refine the platform, explore surrounding markets, and launch fintech products like student credit cards.

Numerous investors, including Zayn VC, Palm Drive Capital, Deem Ventures, and angel investors, support EduFi's mission and place a high priority on the AI-driven platform's ability to improve financial inclusion in Pakistan.

According to Faisal Aftab, per Tech in Asia, general partner and founder of Zayn VC, this development holds considerable importance in the pursuit of financial inclusion for families in the middle and lower income brackets.

With the startup's recent achievement, Aleena Nadeem noted that EduFi is committed to improving literacy and credit penetration in "Pakistan and beyond," emphasizing that the fundraiser "is just the start of the impact" of the pioneering digital platform.

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