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HomeAsiaSingapore based EduFi Secures $6.1 Million in Pre-Seed Funding to Revolutionize Education...

Singapore based EduFi Secures $6.1 Million in Pre-Seed Funding to Revolutionize Education Financing in Pakistan

Singapore/Pakistan

Singapore-based fintech startup, EduFi, has successfully raised $6.1 million in a pre-seed funding round led by Zayn VC, featuring contributions from Palm Drive Capital, Deem Ventures, Q Business, and a group of angel investors.

The two-year-old company, founded by Aleena Nadeem, an MIT graduate with a background in Goldman Sachs and Ventura Capital, has unveiled an artificial intelligence-powered “study now, pay later” (SNPL) lending platform and mobile app in Pakistan. In a country where traditional student loan products are absent, EduFi aims to address the financial challenges faced by students through its innovative approach.

Aleena Nadeem, CEO of EduFi, highlighted the prevalent issues in Pakistan, including high poverty levels and low literacy rates. Approximately 40% of students opt for private schools due to the subpar quality of public education, leading to an annual expenditure of over $14 billion on education. Additionally, more than 50% of adults lack access to financial services like bank accounts and insurance.

Having witnessed the struggles of children trying to access quality education while working with the Progressive Education Network (PEN), a non-profit organization providing free education in Pakistan, Nadeem is determined to bridge the gap between high school graduation and university admission with EduFi.

The startup has already formed partnerships with 15 universities, making its app available to around 200,000 students across Pakistan pursuing undergraduate, Master’s, and Ph.D. programs. EduFi’s lending process involves assessing the financial status of applicants, requiring documents like bank statements or proof of income. Once approved, the funds are directly transferred to the college’s bank.

In its beta phase over the last 18 months, EduFi tested its credit model against 80,000 consumer finance loans, claiming its credit scoring system allows for loan dispersal within 48 hours of application. EduFi has secured approval for a license from the Securities and Exchange Commission Pakistan (SECP) and anticipates its issuance in November.

EduFi aims to revolutionize the traditional banking approach, offering a digital lending app that provides a convenient, straightforward process with flexible loan terms. Nadeem emphasized the transformative potential of EduFi, stating, “Education offers hope and can change the lives of people. EduFi offers this hope and will be a trigger for change in the lives of people.”

The pre-seed capital will be utilized by EduFi to expand its customer base, optimize its platform, enter neighboring markets, and introduce additional fintech products, including student credit cards. Faisal Aftab, General Partner and Founder at Zayn VC, commended EduFi’s innovative approach, describing it as a significant step towards achieving financial inclusion for middle and low-income families in Pakistan.

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