Chinese consumer electronics giant Xiaomi has just shut down one of its micro loan subsidiaries as the microcredit sector enters a slump.
According to a report from National Business Daily Zhuhai Xiaomi Xiao’e Daikuan Co., Ltd. (珠海小米小额贷款有限公司), whose executive director is Xiaomi CEO Lei Jun (雷军), had its business license rescinded on 7 March.
Zhuxiao Xiaomi was established on 7 August 2017 with registered capital of 300 million.
The move by Xiaomi comes amidst tough times for China’s microcredit sector, whose total loan balance fell from 979.949 billion yuan at the end of 2017 to 955.044 billion yuan at the end of 2018 according to Chinese central bank data, for a drop of 24.905 billion yuan, or 2.5%.
Over the same period the number of microcredit companies in China fell from 8551 to 8133, while the number of people employed by the sector fell from 103,988 to 90,839.
Xiaomi still has another micro loan subsidiary in the form of Chongqing City Xiaomi Xiao’e Daikuan Co,. Ltd., whose business scope encompasses various types of loans and bill discounting as well as asset transfers within Chongqing, as well as the the same operations nationally via the internet.