Salman Akhtar, co-founder of AdalFi, on access to credit in Pakistan

AdalFi identified a huge gap in Pakistan, with lots of bank account holders unable to access lending—now it’s changing the game

A small-scale wholesale dealer of dry foods, like cashews and pistachios, wanted to expand his business. 

He had never been considered for a loan before. When he managed to get one, he was so surprised and grateful that he drove 16 hours from Gilgit to Lahore, where AdalFi’s banking partner, Bank of Punjab, is located, to personally thank the team for helping him. 

The help that AdalFi, a lending solution provider in Pakistan, delivered was simple yet crucial. 

Its solution identifies, qualifies, engages and activates prospects for banks, opening an otherwise underserved market while providing access to often-needed sources of capital to people with few alternatives, beyond asking family and friends or seeking an advance on their salaries. 

FinTech Intel spoke to Salman Akhtar, chief executive officer and co-founder of AdalFi, to discuss its lending solution, access to credit in Pakistan, and how it can be improved. 

Salman Akhtar

What is AdalFi and how does its solution work? 

We are an end-to-end digital lending solution provider. We develop credit scoring models to allow banks to score either new or existing customers. We also offer a tech stack that integrates with a bank’s internal systems, to allow these real-time loan disbursement customer journeys. 

The important point about these two offerings, credit scoring and giving out loans in real-time, is the market in which have launched them. 

For example, while credit scoring is not a first-world problem, and certainly not in the UK and the US, in large parts of the world there is no such thing. At the same time, banks are not geared up to give out loans in real-time. 

We provided a way to build a credit score for a certain part of the population. We don’t credit score everyone in Pakistan, we focus on those who have bank accounts.  

But, you see, many banks have not created lending relationships with their deposit customers. The current lending process is time consuming and expensive, so banks only want to lend to top-tier customers, to make it worth their while. 

There’s a lot of people that should have had access to credit, and didn’t, and we are unlocking that access. 

In practice, a bank will implement our solution, which pre-scores their existing population of deposit customers. The bank will then be presented with a list of people who pre-qualify for lending. 

Our solution integrates with a bank’s infrastructure and sends out marketing messages, either via email or SMS, to this list of pre-approved people, offering them the option of a loan. 

These people are then able to simply click through to the application stage. As the bank already has their details, they are simply shown the terms and conditions before the loan is approved and disbursed into their account. 

The whole process takes less than 60 seconds. 

What made you start AdalFi? 

I used to run an IT services company where we would implement banking solutions. We had been doing it for about 15 years, so we were very familiar with that space and the tech.  

It was clear to us there was this huge gap in the lending market, with lots of bank account holders unable to access lending. 

We believed that if we were able to create a model that could auto score, we could really change the game. 

The big leap was convincing the banks to adopt our scoring models. 

What’s in store for the future?  

For now, in 2023, we have a huge market potential, and we are trying to execute in this space. 

We have 14 banks signed up and there are only 23 banks in Pakistan. 

If we can solve this then our next step would be to take our solution to other countries, where we know the problems exist, such as Bangladesh, Indonesia and Egypt. 

Image: © 200mm via Canva

Josh Poyser Josh Poyser is an editor at FinTech Intel. He has written about fintech for several years and appeared at FinTech Connect 2023 on the 'Unlocking Success: The Art of Fintech PR' panel.