Xiaomi has quietly ended its financial services presence in India, less than three years after launching payments and lending apps in the key global market, two sources familiar with the matter told TechCrunch, backing away from what analysts say is a $1 trillion opportunity.
The Chinese giant recently rolled out its Mi Pay and Mi Credit apps in the country from the local Play Store and its own App Store. Mi Pay, which allows users to make transactions on the nation’s UPI payment network, is also not registered among the UPI apps recognized by NPCI, the industry body that regulates UPI.
Xiaomi and NPCI did not respond to a request for comment.
The sudden downturn in its financial services business is a setback for Xiaomi India, which commands the smartphone market in the country and expands profits as the company’s hardware business operates on razor-thin margins.
Xiaomi launched Mi Pay in India in March 2019. The app had over 20 million registered users in the country that year, company executives said at the time.
Later that year, the company launched MiCredit, an app that lends customers $70 to $1,400 at low interest rates. It searches users’ texts and call logs, transaction information and some other details to find their credit worthiness and approved loans through partners within minutes.
In August last year, Xiaomi India head Manu Jain told the media that the company aims to become the biggest player in the Indian fintech space with its Mi Credit and Mi Pay applications. The company considers India to be the largest market for Mi Credit after China, he said.
Several giants, including Facebook and Google, have entered the Indian digital lending market by offering loans to small businesses through partnerships. Digital lending is expected to be worth $1 trillion by 2025, according to estimates from Boston Consulting Group.
Jain, who has since moved on to a different role at the firm, said last year that the company was looking to bring a range of financial services to the South Asian market, including gold loans, line of credit cards and insurance.
It’s not clear why Xiaomi has stopped offering financial services in the country, but the move comes as India’s central bank introduced stricter rules on lending in India to provide a broader description of what information can be accessed on a customer’s phone and the terms. their loan agreement.
Xiaomi has been at the center of intense scrutiny from Indian government agencies. India’s Enforcement Directorate seized Xiaomi’s Indian bank accounts earlier this year after finding that the company had transferred $725 million in “royalty-like” payments to three overseas entities.
Xiaomi executives, who denied the charges and legally challenged the ruling, faced threats of “physical assault” during their investigation with the ED, Reuters reported earlier.
