Chinese handset maker Xiaomi will soon start focusing on its fintech business, which was impacted severely due to the pandemic. Last year, the company’s partners shifted focus from giving out fresh loans to recovering the money from customers.
“Last year, it was really difficult for our fintech business as post the lockdown our entire business came down to zero. The focus then for all our partners on the platform changed from giving fresh loans to ensuring the collections are happening,” Manu Jain, Xiaomi India’s head and Global Vice President said.
“Now that things are getting back to normal, business is slowly getting back to where it should be and we’ll soon start focusing on the growth,” he added.
The handset maker was aiming to become one of the largest players in the country’s fin-tech space through its Mi Credit-lending service and Mi Pay application. It considers India as the biggest market after China for Mi Credit.
Xiaomi, which invested in Bengaluru-based startup KrazyBee to begin a pilot of Mi Credit in 2019, also had plans to further expand its financial products portfolio with new services like insurance and supply chain financing, which it already offers in China.
The company was in talks with bigger banks and more NBFCs to launch more financial services. It onboarded NBFCs or Fintechs such as Aditya Birla Finance Limited, Money View, EarlySalary, ZestMoney, and CreditVidya.
Offerings from Chinese companies such as quick loans, insurance and mutual fund investments failed to gather steam mainly because of the backlash against Chinese companies due to Sino-Indian border tensions for several months, fintech analysts said.
In the last few months, investigation bodies like the Enforcement Directorate (ED) and Criminal Investigation Departments (CID) of various state police forces launched probes against more than two dozen China-backed fintech lenders, such as SnapIt Loan, Bubble loan, Go Cash and Flip Cash and has asked cost gateways like Razorpay and Paytm to stop their dealings with these app-based companies, reports said.
Many such app-based lenders were charging high-interest rates, and in case of defaults, their recovery agents started harassing borrowers publically, which led to suicides in several states.
“We definitely don’t want any user to be harassed during the recovery of their loan. While of course, it’s our partners who issue the loan on our platform, we strive to ensure that users have a good experience and are not harassed,” Jain said.
