Xiaomi has quietly shut down its financial services in India, less than three years after launching the payments and lending app in the major global market, two sources familiar with the matter told TechCrunch, analysts say. That’s a $1 trillion opportunity.
The Chinese giant recently pulled the Mi Pay and Mi Credit apps in the country 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 no longer listed among the UPI apps recognized by NPCI, an industry body that oversees UPI.
Xiaomi and NPCI did not respond to requests for comment.
The sudden closure of the financial services business comes as a blow to Xiaomi India, which commands the smartphone market in the country and has aggressively expanded its offerings to spur profits as the company’s hardware business is on razor-thin margins. Its going on.
Xiaomi launched Mi Pay in India in March 2019. The app had accumulated over 20 million registered users in the country in that year itself, company officials said at the time.
Later in the year, the company launched Mi Credit, an app that let customers lend between $70 and $1,400 at low interest rates. It accesses users’ text and call logs to view transaction information and some other details to determine their credit-worthiness and loans sanctioned to them through partners in a matter of minutes.
In August last year, the then head of Xiaomi India Manu Jain told media outlets that the company was aiming to become one of the biggest players in India’s fintech space through the Mi Credit and Mi Pay apps. He added that the company considers India to be the largest market for Mi Credit after China.
Scores of giants, including Facebook and Google, have entered India’s digital lending market, providing loans to small businesses through partners. According to estimates from Boston Consulting Group, digital lending is expected to reach $1 trillion by 2025.
Jain, who has since assumed a different role within the firm, said last year that the company is looking to bring many more financial services, including gold loans, credit line cards and insurance, to the South Asian market.
It is not clear why Xiaomi stopped offering financial services in the country, but the move comes at a time when India’s central bank has proposed tougher rules for lending in India, making it mandatory that they can access all the data on the customer’s phone and make comprehensive disclosures about the terms. of their credit agreement.
Xiaomi has also been at the center of intense scrutiny by Indian government agencies. The Indian Enforcement Directorate seized Xiaomi India’s bank accounts earlier this year after finding that the company had paid $725 million to three foreign-based entities “under the guise of royalties”.
The Xiaomi executive, who has denied the allegations and legally challenged the ruling, faced threats of “physical violence” during his investigation with the ED, Reuters previously reported.