Chinese tech giant Xiaomi has obtained approval from China’s banking regulator for the establishment of a consumer finance company.
On 17 January the China Banking and Insurance Regulatory Commission (CBIRC) gave its approval for Xiaomi Communications Technology Co., Ltd. (小米通讯技术有限公司) to establish Chongqing Xiaomi Consumer Finance Co., Ltd. (重庆小米消费金融有限公司) in the central Chinese municipality of Chongqing.
The move comes after the CBIRC’s Chongqing office gave its approval in November last year for Chongqing Rural Commercial Bank (重庆农村商业银行) to invest 450 million yuan in the establishment of Chongqing Xiaomi Consumer Finance in exchange for a 30% equity stake.
A total of 24 consumer finance companies in China have obtained approval from Chinese regulators to commence operations, with tech giants Baidu and Alibaba already entering the sector.
Xiaomi has seen roaring growth on the back of its affordable consumer electronics devices, becoming the world’s fourth-largest smartphone manufacturer by the second quarter of 2018.
The company is making a bold foray into the fintech sector to complement its successes in the consumer electronics sphere. At a 2019 developers conference Xiaomi Finance chair and CEO Hong Feng (洪锋) said that the company would vigorously push for further tech innovations in the areas of retail and industry finance.
According to a 2019 half-year report from Hong Kong-listed Xiaomi Group, in the second quarter of 2019 fintech operating revenues grew 62.7% YoY to hit 792 million yuan, driven primarily by consumer lending and supply chain financing.