Xiaomi launches digital lending, with instant loan offers on user phones

Leading smartphone entity Xiaomi has entered the digital lending space in India, with the launch of a ‘Mi Credit’ product. The company is offering instant personal loans to its users, through offers that appear on their lock screen while they are using the phone.

The company launched this in partnership with KreditBee, a lending platform aimed at students and young professionals. Xiaomi’s loans are also aimed at young professionals -they cater to short-term needs for cash. The company says the loans can be initiated in 10 minutes through a simple KYC (Know Your Customer) verification. Xiaomi’s partner is responsible for disbursing the loan; its platform functions as a loan aggregator.

More partners are to be added but KreditBee is offering loans from Rs 1,000 to Rs 100,000 on Mi Credit to Xiaomi users at an interest rate of three per cent a month, translating to 36 per cent annually — in line with credit card interest rates in the country. 

The differentiating factor in Xiaomi’s partnership is that it is exclusively for own phone users — other Android users cannot use the service. This could be aimed at boosting phone sales further.

The company is the leading smartphone vendor in India, with a market share of 31.1 per cent, followed by Samsung’s 25 per cent, shows IDC’s latest data. 
In this regard, Xiaomi is looking at launching more of value added services, after Mi Music and Mi Video. Manu Jain, managing director at Xiaomi India, says they are looking to further expand its MIUI platform, to provide services such as content, entertainment, financial services and productivity tools. 

“The connectivity between our devices and the seamless integration between hardware and internet services enable us to provide our users with better user experience,” he said about the launch of Mi Credit.

Adding: “Mi Credit is another big step in bringing an important internet service to India and we trust our users would be able to truly benefit as the service becomes more sophisticated.”

A Xiaomi spokesperson told Business Standard  that its partners are responsible for collecting and verifying all application information from users -- as mentioned earlier, the company’s role is limited to providing a platform. Users have been seeing offers for a loan on their phones since the launch of Mi Credit. 

They are redirected to the company’s site on clicking the link, which then collects information and the process of a loan is initiated. While applying, it is important to read the fine print on the site, for clauses such as the processing fee. KreditBee charges one of Rs 100 to Rs 1,000, depending on the loan amount. This is deducted from the loan principal upfront before it is disbursed to the user. 

Xiaomi didn’t answer queries sent by Business Standard on expansion plans, regulatory space for the product and the interest rates on offer.



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