Chinese smartphone manufacturer Xiaomi Corp has just launched its digital lending platform Mi Credit in India. The company's personal loan service is aimed at young professionals in the world's second-most populous country.
For nine consecutive quarters, Xiaomi has been the top smartphone vendor in India. Last year, the company had shipped more than 100 million phones to the country. The company likely wants to capitalize on its already substantial user base to push its other internet services, including its Mi Credit digital lending platform.
Xioami has successfully operated its Mi Credit-lending services in China for the past years. In 2018, the company's platform managed to accumulate a loan book of around $8 billion with outstanding balances of $2 billion.
The company's Mi Credit-lending platform essentially offers users the ability to take out loans from 5,000 Indian rupees to 100,000 Indian rupees with very low-interest rates. In order to offer loans to Indian users, Xiaomi has partnered with a number of domestic financial institutions.
The company's partners include local startups such as Zest Money, Credit Vidya, Money View, Early Salary, and Aditya Birla Finance. The aforementioned companies not only provide Xiaomi with assistance in handling loans but they also help the company determine individuals that are eligible for loans.
Xiaomi's entry in the country's lucrative internet finance market follows similar moves made by other Chinese tech firms. Tech giants Alibaba Group and Tencent Holdings had already previously established their presence in the country through various investments in the country's internet finance sector.
The online finance arm of Alibaba, Ant Financial, had made a substantial investment in the country's largest mobile payment platform Paytm. Meanwhile, Tencent had reportedly bought a minority stake in Indian online insurance aggregator Policybazaar.com.
Chinese tech companies are apparently starting to realize India's potential given its rapid adoption of new technologies. Internet and smartphone availability in India is rapidly growing as millions of people are brought online each and every day. India's digital lending the sector is expected to be worth more than $1 trillion by 2023 as more users turn to digital lenders for their needs.
Unlike Tencent and Alibaba, who have only made investments in existing local platform operators, Xiaomi does have a huge advantage when it comes to getting more users. Xiaomi could potentially pre-install its Mi Credit app on all of the future smartphones it will sell in India, essentially tapping into millions of users simultaneously. It also has the option of rolling out a new update to its existing smartphones that can include its Mi Credit app preinstalled.
