EduFi Revolutionizes Higher Education Access in Pakistan with AI-Powered Loans

In Pakistan, where access to higher education is limited for many due to financial constraints, EduFi is emerging as a game-changer. Founded by Aleena Nadeem ’16, EduFi is offering low-interest student loans to a broader range of Pakistanis, making college more accessible than ever before.

Unlike in the United States, Pakistani students often struggle to secure college loans, forcing families to rely on personal loans with high-interest rates and collateral requirements. This has resulted in only about 13 percent of Pakistani students attending college. EduFi aims to change this by using an artificial intelligence-based credit scoring system to qualify borrowers and pay colleges directly. Borrowers then make monthly payments to EduFi along with a service fee of 1.4 percent—significantly lower than traditional options.

“The fees for college are extremely unaffordable for the average middle-class person right now,” Nadeem explains. “With our ‘Study Now, Pay Later’ system, we’re breaking that big upfront cost into installments, which makes it more affordable for both existing college students and a new group of people that never thought higher education was possible.”

Incorporated in 2021, EduFi gained regulatory approval and began disbursing loans across Pakistan last year. In its first six months, EduFi disbursed over half a million dollars in loans. The company’s inclusive approach has proven successful, with less than 1 in 10,000 loans not being repaid.

Nadeem believes that as awareness of EduFi grows, the company can contribute to Pakistan’s broader modernization and development. By providing affordable credit to the educational sector, EduFi is enabling more people to attend college, which has a significant impact on a developing country like Pakistan.

EduFi’s AI-driven credit scoring system assesses a borrower’s financial history and makes payments directly to the college. The company also collaborates with colleges to consider students’ grades and payment history. This innovative approach allows EduFi to qualify more people for loans compared to traditional banks and does so five times faster, making college more accessible to students across Pakistan.

“Banks charge high interest rates to the people with the best credit scores,” Nadeem says. “By not taking collateral, we really open up the credit space to new people who would not have been able to get a bank loan. Easier credit gives the average middle-class individual the ability to change their families’ lives.”

Looking ahead, EduFi plans to expand to Saudi Arabia and eventually offer its loans throughout the Middle East. Nadeem envisions improving the global student loan system using EduFi’s model, drawing inspiration from SoFi and Grameen Bank to extend credit to lower-income individuals and uplift them out of poverty.

EduFi received its non-banking financial license in February 2024 and has since gained traction through word of mouth. Nadeem regularly receives messages from students across Pakistan expressing gratitude for EduFi’s role in helping them attend college.

“Education is the core pillar from which a country stands,” Nadeem says. “You can’t progress as a country without making education as accessible and affordable as possible. EduFi is achieving that by directing capital at what is frankly a starving education sector.”