Xiaomi plans to foray into consumer finance and business-to-business lending by floating a non-banking financial company (NBFC), the Chinese smartphone and electronics major has said in its latest regulatory disclosure.

The new company, Xiaomi Financial Services India, will soon seek the Reserve Bank of India’s approval to operate as an NBFC.

The company was incorporated on October 10 as a subsidiary of Xiaomi Finance HK Ltd and Xiaomi Singapore Fintech, data accessed from the Registrar of Companies (RoC) showed. As per the memorandum of association of the company, the directors include Xiaomi Corp cofounder Feng Hong and Xiaomi India MD Manu Kumar Jain.

Xiaomi Financial Services plans to provide loans to consumers for purchasing electronics, home appliances, lifestyle products, vehicles, furniture, tools, utensils and office equipment, and give credit to firms, corporates or any other entity “for the purpose of purchase and acquisition of goods, merchandise, assets of any nature”, according to the Chinese firm’s RoC disclosure.

Xiaomi globally sells all these consumer products and has plans to launch most of them in India over the next two years, having already forayed into TV, smart home and lifestyle products. The firm has indicated that it will operate these services through online platforms.

"It will not undertake any core banking function until it obtains requisite license from RBI," it said.

Two senior industry executives said Xiaomi has long-term plans for applying for banking licence after meeting all the norms laid down by the central bank.

A Xiaomi spokesperson said there are multiple intermediaries across markets for various business purposes, but declined to share any details about Xiaomi Financial Services.

About two years ago, India allowed 100% foreign direct investment in NBFCs.

Xiaomi already operates two of its financial services in the country along with partners - Mi Credit, a platform for instant personal loan of up to Rs 1 lakh for professionals run in partnership with Bengaluru-based fintech firm KreditBee, and Mi Finance that offers cardless EMI scheme in tieup with Bengaluru-based Camden Town Technologies, which runs consumer lending platform ZestMoney.

A senior industry executive said Xiaomi will eventually run these operations by itself as it wants direct control in all activities to better manage operations, expand revenue growth, and save on cost.

Xiaomi had recently started directly selling its products to consumers by setting up company-owned Mi Home stores and also through its own e-commerce platform, Mi.com, utilising the single brand retail FDI in automatic route.

The Chinese smartphone maker is in a neck and neck battle with Korean rival Samsung for leadership in the Indian smartphone market. In televisions, the firm has already sold five lakh units in the last six months since it forayed into the segment.