Xiaomi has had its eyes set on the consumer finance sector for a long time running. The sector has proven to be an important and lucrative one for the likes of Alibaba, Tencent etc. TheChina Banking and Insurance Regulatory Commission announced on Friday that it has given Xiaomi the nod to set up a consumer finance company in Chongqing, a municipality in the southwest of the country. The regulatory body gave a six-month deadline from the January 10 approval date for the entity to be established.
The consumer finance outfit has as its key shareholders Chongqing Rural Commercial Bank (CRCB), and three other Chongqing-based companies. Proposed registered capital is set at RMB 1.5 billion ($218.6 million).
Chinese media reported in November that Xiaomi would become the 28th company in the country to acquire a consumer finance license, joining Baidu, Alibaba, and many others.
Xiaomi told Chinese media that setting up the new company will help it to gain a firmer foothold in Chongqing, and it expects to expand consumer finance across the country.
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Shortly before the Chinese tech giant launched its 2018 initial public offering on the Hong Kong stock exchange, it disclosed that it planned to spin off its finance business into an independent entity. The move was seen by many as a way for the financial arm go public.
Consumer finance is seen as a veritable alternative for the company considering the slow growth witnessed by its smartphone business in recent times. Xiaomi’s financial product portfolio includes consumer loans, supply chain finance, financial technology, third-party payments, online insurance, and digital banking. The Chinese company is equally eyeing lucrative financial technology markets overseas. It acquired its digital banking license in Singapore earlier this month and was said to be in talks to expand its financial product offering in India late last year.
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