Xiaomi Shrugs Off Privacy Concerns and Bets on India Digital Lending
Xiaomi is expected to launch a consumer lending business in India in the coming weeks but key concerns remain regarding privacy and the smartphone maker’s data collection practices.
Xiaomi’s «Mi Credit» service is currently operating in its «beta phase» in India and expected to officially debut in several weeks to offer loans of up to 100,000 Indian rupees ($1,451) with interest rates starting at 1.8 percent, according to a «Reuters» report.
India is Xiaomi’s largest market outside China with some 70 million phones installed in the country, according to market researcher Counterpoint. Given the significant penetration rate, the firm will look to leverage the customer base and provide services in line with its intentions to focus on «consumer loans» in addition to supply chain financing, according to the firm’s recent financial report.
The report added that fintech revenues for Xiaomi increased nearly 63 percent year-on-year to $112 million.
Privacy Matters
A major strength of Xiaomi’s digital lending is its ability to efficiently gather various data directly from a user's smartphone to determine their credit score and approve loans. Reuters said that Xiaomi documents cover the tracking of phone activity such as a user’s «identity, life stage, lifestyle, social relationships, and brand loyalty».
Disclaimers which users sign include agreements to share personal data such as professional and educational backgrounds, temporary message history, and app usage and browser history. Those that sign also agree to allow Xiaomi to share «personal information from time to time to Xiaomi-affiliated companies or third party service providers».
Xiaomi’s financial unit made a 2018 exit in Indonesia and Reuters claimed that sources from the bank it had partnered with pulled out due to concerns about the invasive data collection practices. According to the anonymous source, who claims to be a senior executive at the partner bank, data collected for credit scoring included so-called lifestyle changes such as a divorce or a promotion.
