Xiaomi bets big on finance play in India with Mi Credit: Key things to know
Xiaomi on Tuesday officially announced the launch of digital lending platform, Mi Credit. The service aims to help people get smaller loans completely online. The company has partnered with firms such as Aditya Birla Finance Limited, Money View, EarlySalary, Zestmoney and CreditVidya for facilitation of the loans.
Xiaomi's Mi Credit has been available to users in select cities as part of a pilot project. The Chinese company, mainly known for its affordable handsets and TVs, revealed it had already disbursed over 28 crores in November 2019 with more than 20% of its customers availing the maximum loan amount of ₹1 lakh. Xiaomi plans to extend Mi Credit to 100% of the pin codes by March 2020, up from the current 1,500 pin codes across 10 states.
Booming digital lending market
With Mi Credit, Xiaomi is aiming to tap the growing digital lending market in India. According to a 2018 joint study by Omidyar Network and Boston Consulting Group (BCG), digital lending for micro, small and medium enterprises (MSME) will grow to $100 billion by 2023. Another DataLabs report estimates credit demand in India will be around $1.41 trillion by 2022. According to an entrepreneur report, more than 1,000 fintech startups were founded in India in last two years with funding of over $2.5 billion.
Xiaomi's fintech interest
While Xiaomi has mainly focused on hardware in India, it has also begun focusing on services. Already, the company offers Mi Pay. Rival to the likes of Google Pay and Paytm, Mi Pay is based on the UPI platform. Since its launch in March 2019, Xiaomi's Mi Pay has secured over 18 million users in the country. Xiaomi already offers finance-related services in its home market China. India, however, is its main market where the company leads the budget and mid-range smartphone categories.
Overcome all the hurdles and get your personal loan💰 with #MiCredit— #MiFan Manu Kumar Jain (@manukumarjain) December 3, 2019
Super easy & convenient way to get money💵 for all your needs-:
- Apply for a loan in just 5 minutes
- get real-time disbursement
- all major banks are covered#MoneyWhenYouNeedIt #Xiaomi ♥️ @MoneyWithMi pic.twitter.com/FCHvpGKdXo
Xiaomi is unlikely to be unperturbed by the mounting public concern over how finance and technology companies handle users data. Xiaomi has stumbled upon regulatory challenges in Indonesia where the company had to shut down its financial unit. In India, Reserve Bank of India has stressed on localizing of data. Google Pay and other similar platforms have already announced compliance to the data localisation norms.
Addressing security concerns, Xiaomi said all user data on Mi Credit is "stored securely in encrypted format in India through our partner Amazon Web Services Cloud Infrastructure."
Other players in the segment
While Mi Credit is more of an aggregator for digital lending, there are several other fintech firms in the segment. PayU Money is one of the top names in the industry. The company, backed by the likes of Nasper, last month invested ₹50 crore in lending business PayU Finance, erstwhile known as LazyPay. Razorpay last year introduced digital lending platform.