Chinese smartphone maker giant, Xiaomi is planning to enter consumer financing and B2B lending in India. The company will float new NBFC ‘Xiaomi Financial Services India’ and seeking RBI licence for it.
According to the latest regulatory filing by Xiaomi, the new company was incorporated on October 10 as a subsidiary of Xiaomi Finance HK Ltd and Xiaomi Singapore Fintech. The yet to be launched NBFC’s board of director include Xiaomi Corp cofounder Feng Hong and Xiaomi India MD Manu Kumar Jain.
Xiaomi was looking for an NBFC licence for a long time and it already forayed into fintech lending with two entities MI Credit and MI Finance.
While MI Credit provides personal loans of up to Rs 1 lakh for professionals in partnership with KreditBee, the company has tied up with lending platform ZestMoney that offers cardless EMI facility through MI Finance.
As India allows 100 per cent FDI in NBFC, Xiaomi will leverage its new platform to provide loans to consumers for e-commerce purchasing as well as give credit to firms, corporates, and other B2B entities.
Industry experts also hinted that Xiaomi wants to run these operations by itself for better management operations, expanding revenue growth, and save on cost, reports ET.
In July, the issue of no restriction in terms of foreign ownership in NBFCs was highlighted by Bharatiya Janata Party’s member of parliament, Narendra Jadhav. Jadhav had made a strong remark on Chinese investors who are looking to enter India via NBFC route.
According to him, if Chinese companies such as Alibaba, Xiaomi are allowed to dominate the NBFC sector, it could lead to predatory pricing as well as risk to a large amount of private and financial data.
As of now, Alibaba offers financial aid through its tie-ups with Aditya Birla Group’s NBFC arm, IDFC Bank, and Kotak Mahindra Bank.