With an ambitious play into a booming financial services space that presents challenges that include fierce competition, China’s Xiaomi is reportedly gearing up to roll out a consumer lending business in India. The stakes are high for the company, which has a business that relies on sales of low-margin hardware with a critical profit center in services, Reuters reported.
Xiaomi’s new Mi Credit offering is set to debut in the weeks to come, offering loans of up to $1,451 or 100,000 rupees with interest rates beginning at 1.8 percent. A spokesperson for the company told the outlet the service was working in “beta phase” but did not provide details.
India is said to be the biggest market for the company outside of China. It has an installed base of approximately 70 million phones, per a market researcher.
For Q2, the company’s FinTech revenues increased 62.7 percent year-on-year to RMB 792 million or 112 million, per reports from the company citing a focus on “consumer loans and supply chain financing.”
The report also noted that Xiaomi is betting it can harness its leading position in India’s smartphone market to tap into the lucrative (albeit crowded) financial services space. Public concern when it comes to data privacy could “make it a bumpy road for the Chinese firm.”
In separate news, Xiaomi unveiled its mobile payment service called Mi Pay, which is based on the Unified Payments Interface (UPI), at a media event in India. With the app, users can make payments via multiple options like credit cards, debit cards, UPI and net banking.
The payment option, which was first rolled out in 2016 in China, enables contactless payments similar to Google Pay, Apple Pay and Samsung Pay. In addition, as was the case with Google and Google Pay, Xiaomi tapped the UPI system for its payment service.