Singapore-based Fintech Startup Targets Educational Financial Barriers with
AI-Powered Study Now, Pay Later Platform
EduFi, a pioneering fintech startup committed to easing financial constraints for students pursuing education, has successfully secured $6.1 million in a pre-seed funding round. The funding was led by Zayn VC, with participation from Palm Drive Capital, Deem Ventures, Q Business, and angel investors.
EduFi, founded by Aleena Nadeem, an MIT graduate and former professional at Goldman Sachs and Ventura Capital, has introduced an Artificial Intelligence-powered Study Now, Pay Later (SNPL) lending platform through its mobile app in Pakistan. Notably, Pakistan lacks a dedicated category for student loans, forcing users to opt for personal loans with high interest rates and lengthy application processes.
The fintech startup aims to address two critical issues in Pakistan – high poverty levels and low literacy rates. Approximately 40% of students in the country attend private schools due to the poor quality of public schools, resulting in an annual spending of over $14 billion on education. Additionally, more than 50% of the adult population in Pakistan lacks access to financial services such as bank accounts and insurance.
Aleena Nadeem, CEO of EduFi, drew inspiration from her experience working at Progressive Education Network (PEN), a nonprofit organization providing free and quality education to underprivileged children in Pakistan. EduFi seeks to bridge the gap between high school graduation and university admission by injecting capital into this critical phase.
In its two-year journey, EduFi has already formed partnerships with 15 universities in Pakistan, making its app accessible to around 200,000 students pursuing undergraduate, Master’s, and PhD programs.
EduFi’s lending app requires applicants to submit their financial status, such as the previous 12 months’ bank statements or a reliable source of income supporting loan repayments. The startup claims its credit scoring system enables the dispersal of student loans within 48 hours of application, a significant improvement compared to traditional banks that typically take three to four weeks.
While awaiting approval for a license from the Securities and Exchange Commission Pakistan (SECP), expected in November, EduFi continues to validate its product and service with potential customers, collecting feedback and data for further improvement.
The pre-seed capital will be utilized to expand EduFi’s customer base, optimize its platform, venture into neighboring countries, and introduce additional fintech products, including student credit cards.
Faisal Aftab, General Partner and Founder at Zayn VC, commented, “This is a significant step towards achieving financial inclusion for middle and low-income families. EduFi’s innovative approach will help alleviate this burden and empower families to invest in their children’s future.”
EduFi’s vision extends beyond financial services, aiming to be a catalyst for change in the lives of aspiring families and providing hope through education.
