Xiaomi has been the talk of the town in the past few months. Ever since becoming the most sold smartphone company in India, Xiaomi has been pretty ambitious. From launching its own sub-brand to compete with Samsung and OnePlus smartphones to developing smart TVs, Xiaomi has been everywhere. And now, it has managed to go one step further with the scheduled creation of a non-banking financial company (NBFC) called Xiaomi Financial Services India.
Xiaomi Financial Services India
That is going to be the name of the new NBFC that Xiaomi is planning to launch. This venture of Xiaomi into consumer finance and business-to-business lending signifies the ambitious plans that the Chinese company has to make use of the absolutely huge consumer base that it has gathered over such a short period of time. News of this entity broke out upon the revelation the company’s regulatory filings with the Registrar of Companies. The company is now planning to take the RBI’s approval to start operating as an NBFC.
However, this isn’t the first time when the Chinese giant has tried to enter the financial market space of the country. In May of this year, Xiaomi launched Mi Credit – a platform to generate instant financial lending, in association with lending platform Krazybee. Xiaomi had earlier invested in Krazybee before launching Mi Credit. Users on Mi Credit can start by entering a few details along with a KYC verification, the company claims.
What is An NBFC?
The Reserve Bank of India describes an NBFC as “a company registered under the Companies Act, 1956 engaged in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of immovable property.”
In simple terms, NBFCs are the financial institutions that offer banking services. However, these services do not comply with the legal definition of a bank, i.e. they do not hold a bank license. Major NBFCs in the country include Power Finance Corporation Limited and Mahindra & Mahindra Financial Services Limited. The latest addition to the NBFCs of the country has been PayU’s very own NBFC, PayU credit. The Naspers owned fintech major gained RBI’s approval to operate its own NBFC just last month.
Fintech: One For the Future?
With the increase in major companies taking more and more interest in fintech, it has become very evident that the big players view it to be a major platform of growth in the near future. The companies like Xiaomi, who belong to a different market altogether, are willing to try their luck with this. Due to this, the already existing fintech companies are trying to take steps to maintain their dominance in the field. Even with PayU releasing its own NBFC, Paytm is trying to seek RBI’s approval to operate a Peer-to-Peer lending platform in the country. As long as more and more companies take interest in fintech, India will surely be moving fast towards a modern financial world deeply integrated with technology in each step. Let’s hope to see them in operational as soon as possible.