This archive report was first published on 4 December 2019.
December 4, 2019
Indian Smartphone Giant Enters Loan Market ¶
Xiaomi, the leading smartphone seller in India, has launched Mi Credit, a personal loan service targeting millennials in the country. The app, available exclusively for the Indian market, connects borrowers with loan providers, offering competitive interest rates and flexible repayment terms.
Unlike traditional loan apps in Kenya, Mi Credit does not provide credit directly. Instead, it serves as a link between borrowers and loan providers, allowing users to access a range of loan options from multiple lenders.
The app's registration process involves downloading the app from the Play Store, registering with a Mi Account and phone number, uploading identification documents, and adding bank details for transactions. This is similar to loan apps in Kenya, but with a key difference: Mi Credit requires users to provide more detailed information, including identification documents and bank details.
Users can borrow between 1,000 and 100,000 rupees (approximately 1,500 to 150,000 Kenyan shillings), with repayment periods ranging from 91 days to three years. The interest rate starts at 1.35% per month, which is significantly lower than the high interest rates found in Kenya.
One of the unique features of Mi Credit is its ability to calculate a user's credit score, free of charge. To do this, the app requires users to grant permission to view their texts and call logs. The entire loan application process is said to take only five minutes.
Xiaomi has assured users that all data is stored and encrypted in Indian data centers, and that all lenders on board have signed agreements on data protection.
While Mi Credit may not be available in Kenya, the concept of a single app connecting borrowers with multiple lenders is an interesting one. In Kenya, lenders often have their own separate apps, each with their own rules and requirements. A single app like Mi Credit could potentially offer users a wider range of loan options and more flexible repayment terms.
