Xiaomi ends its financial services business in India • TechCrunch

Xiaomi has quietly halted its financial services in India, less than three years after launching payment and lending apps in the key global market, two sources familiar with the matter told TechCrunch, backing out of what analysts consider to be a trillion dollar opportunity.

The Chinese giant recently removed the Mi Pay and Mi Credit apps from the local Play Store and its own app store. Mi Pay, which allowed users to transact on the country’s UPI payment network, is also no longer among the UPI apps recognized by NPCI, an industry body that oversees UPI.

Xiaomi and NPCI did not respond to a request for comment.

The abrupt shutdown of financial services business is a setback for Xiaomi India, which dominates the smartphone market in the country and has aggressively expanded its offerings to boost profits, as the company’s hardware business operates on razor-thin margins.

Xiaomi launched Mi Pay in India in March 2019. The app had amassed more than 20 million registered users in the country that year, company executives said at the time.

Later in the year, the the company launched Mi Credit, an app that lent customers between $70 and $1,400 at low interest rates. It accessed users’ texts and call logs to research transaction information and other details to determine their creditworthiness and approved loans through partners in minutes.

In August last year, Manu Jain, then head of Xiaomi India, told the media that the company aimed to become one of the biggest players in the Indian fintech space through the Mi Credit and Mi Pay apps. The company saw India as the biggest market for Mi Credit after China, he said.

Dozens of giants, including Facebook and Google, have entered India’s digital loan market, offering loans to small businesses through partners. Digital loans are expected to be worth $1 trillion by 2025, according to Boston Consulting Group estimates.

Jain, who has since changed roles at the company, said last year that the company was looking to offer several other financial services, including gold loans, credit line cards and insurance, on the South Asian market.

It’s unclear why Xiaomi has halted financial services offerings in the country, but the move comes at a time when India’s central bank has proposed tough rules regarding loans in India, mandating all data they can access on the a customer’s phone and broader terms disclosures. of their credit agreement.

Xiaomi has also been the center of intense scrutiny from Indian government agencies. Earlier this year, India’s Directorate of Law Enforcement seized Xiaomi India’s bank accounts after discovering that the company had paid $725 million to three overseas-based entities “under cover of royalty payments. “.

Executives from Xiaomi, which refuted the charges and legally challenged the decision, faced threats of “physical violence” during their investigation with ED, Reuters reported earlier.