Xiaomi shuts its financial services business in India

In India, Xiaomi India discreetly ended its financial services operation. According to reports, the business has retreated from a $1 trillion opportunity by removing its Mi Pay as well as Mi Credit apps from the Google Play Store along with its own app store in India.

The Mi Pay, which allows users to conduct transactions on the country’s UPI payments network, is indeed no longer included among the certified UPI apps by the NPCI, an industry group that governs UPI.

The sudden closing of the financial services operation is a setback for Xiaomi India, which is the leader in the country’s smartphone market and has been expanding its services to bring in more money while its hardware division struggles with razor-thin margins.

In March 2019, Xiaomi introduced Mi Pay in India. According to corporate executives, the app has over 20 million active users in the country this year. The firm developed Mi Credit, an app that lent consumers $70 to $1,400 at low interest rates, later in the year. It looked at users’ texts and call logs for transaction information and other details to figure out if they were creditworthy.

In minutes, loans were given through affiliates. In August 2018, Xiaomi India’s then-CEO Manu Jain informed media outlets that the company wanted to become one of India’s biggest fintech companies with Mi Credit and Mi Pay apps. He added that after China, Mi Credit’s greatest market was India.

The Indian government authorities have also given Xiaomi a lot of attention. Xiaomi India’s bank accounts were frozen earlier this year by the Indian Enforcement Directorate after it was discovered that the business had sent $725 million to three overseas organizations “in the guise of royalty” payments.

Xiaomi stopped offering financial services in the country for unknown reasons, but the move happened around the same time that the central bank of India proposed strict lending rules. These rules would limit what information lenders can access on a customer’s phone and require more information about the terms of their credit facility.

In a statement, Xiaomi said:

As part of the annual strategic assessment activity and as a response to enhanced focus on our core business services, we closed the Mi Financial Services in March 2022. In a short span of 4 years, we were able to connect and support thousands of customers. We are working with our partners and supporting our consumers during this process

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