A new fintech startup EduFi wants to make education more affordable and accessible for students in Pakistan. The Singapore-based startup has raised $6.1 million in a pre-seed round led by Zayn VC, with participation from Palm Drive Capital, Deem Ventures, Q Business, and angel investors.
EduFi has launched an artificial intelligence-powered study now, pay later (SNPL) lending platform that allows students to apply for loans for their education.
The platform uses a proprietary credit scoring system that evaluates the students’ academic performance, future earning potential and other factors. EduFi claims that its credit scoring system allows for the dispersal of student loans within 48 hours of application and the quick disbursal of the loan.
The two-year-old company has already had partnerships with 15 universities, allowing the app to be available to about 200,000 students who must pay their fees for undergrad, Master’s and PhD across Pakistan.
EduFi, which has received approval for a license to make loans from the Securities and Exchange Commission Pakistan (SECP), is waiting for the license to be granted, which is expected in November.
“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,” founder and CEO of EduFi Aleena Nadeem said.
In Pakistan, about 40% of students attend private schools due to public schools’ poor quality, resulting in spending more than $14 billion on their education every year. Moreover, over 50% of the adult population in Pakistan does not have access to financial services such as bank accounts and insurance.
EduFi wants to address the country’s two issues, high poverty levels and low literacy rates, via its fintech platform. It plans to use the new funding to expand its team, scale its operations and partner with more educational institutions and employers in Pakistan. The startup also hopes to eventually expand to other emerging markets in Asia and Africa, where there is a similar demand for education financing solutions.