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Future-ready finance: EduFi bags $6.1M to introduce ‘Study Now, Pay Later’ student loans

EduFi team. Image credit; EduFi

Education is a key catalyst for economic growth and social development in any country. In Pakistan, families often view state schools as sub-standard, preferring to enrol their children in fee-paying schools. However, many families find these inaccessible due to the financial challenges, which often force them to compromise on the quality and continuity of their children’s education.

EduFi, a fintech startup out of Singapore, seeks to empower students and families through its innovative digital student loan platform. Their “Study Now, Pay Later” lending platform aims to make educational financing in Pakistan more easily accessible. EduFi’s mission is to provide affordable and flexible financing options for students, allowing them to pursue their academic dreams. EduFi is uniquely positioned to do so, considering that approximately 40% of students in Pakistan attend fee-paying schools, with an annual expenditure of over $14 billion on education.

Securing support from investors

EduFi has just announced a $6.1m pre-seed funding round to launch their student loans with Study Now Pay Later platform. The round comprised of prominent investors from across the globe. These include Zayn VC, who led the round, Palm Drive Capital, Deem Ventures Ltd, Q Business, Abhi, and several angels.

Revolutionising student loans with fintech

EduFi operates as a fintech platform and mobile app, streamlining the process for students to secure loans for their school fees. EduFi works with liquidity providers and schools to drive successful student loans. The platform is underpinned by a proprietary education sector focused credit scoring model using advanced machine learning algorithms and artificial intelligence.

Aleena Nadeem’s vision for Edufi

Aleena Nadeem, the Founder and CEO of EduFi, articulated the essence of their mission, saying, “We conceived and built this product to serve markets that have low credit penetration. Pakistan presented an ideal opportunity to launch because the need is the greatest, and we had a first-mover advantage.” She further emphasised the critical role of student loans in addressing two of Pakistan’s major challenges- high levels of poverty and low literacy rates. Aleena sees student loans as a potential catalyst for economic growth in the country, by enabling more students to access quality education and improve their employability and income prospects.

Tech stack empowering educational institutions

EduFi has engineered a comprehensive tech stack that not only provides visibility to liquidity providers on their capital performance and risk management but also empowers schools to monitor various student performance metrics, such as attendance, overdue fees, dropout rates, and academic performance. In addition, the EduFi App UX offers an unparalleled pathway for users to quickly and easily access student loans. This end-to-end tech stack enables the EduFi credit scoring system to dispense student loans within 48 hours of application.

A transformative alternative to traditional lenders

EduFi is transforming the student loan application process, offering a faster, simpler, and more accessible alternative to traditional lenders. Unlike banks, which do not offer student loans and instead require borrowers to take personal loans with high interest rates and collateral requirements, EduFi offers a user-friendly and convenient experience, where borrowers can apply for loans and access funds quickly and securely with flexible repayment options.

Aleena Nadeem’s inspiring journey

EduFi was founded in Singapore in 2021 by Aleena Nadeem. Her MIT education and successful finance career convinced her that education opens pathways, paving the way for this endeavour. With a team that boasts several decades of combined experience in banking, education, and technology, EduFi has developed an intuitive, transparent, and secure platform to serve its users effectively.

Edufi’s vision for a community of empowered students

EduFi’s vision extends beyond being a platform, they aim to become a lifeline and community for aspiring students to unlock their true potential. EduFi is now available to over 200,000 students to pay their school fees through its partnerships with 15 colleges across Pakistan.

Faisal Aftab, General Partner & Founder at Zayn VC, expressed enthusiasm for supporting EduFi’s vision, “We are thrilled to support Aleena’s vision for EduFi, which aims to provide financing options for families to fund their children’s higher education. This is a significant step towards achieving financial inclusion for middle and low-income families. In Pakistan, families spend more than 50% of their income on their children’s education, which has become increasingly challenging due to inflationary pressures. EduFi’s innovative approach will help alleviate this burden and empower families to invest in their children’s future.”

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