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Xiaomi is the latest entrant into the payday lending space in India

Xiaomi

Xiaomi is getting into the payday lending space, courtesy KreditBee. The service will be available to people on the MIUI firmware on most of Xiaomi’s phones. KreditBee is a payday lending service aimed at young working professionals. It is owned by KrazyBee, a similarly named company that offers students personal loans and EMIs. KrazyBee runs on $2 million in seed funding it acquired from Chinese microlender Fenqile and ad network Yeahmobi.

KreditBee provides loans for periods between 15 days and three months. The annualized interest rate is 36%, with a processing fee between ₹100 and ₹1000, depending on the loan amount.

The service requires users to consent to the use of data collected on them by Xiaomi — even for non-MIUI users.

App-based payday lending in India

KreditBee follows in the footsteps of a number of similar services. Take EasySalary, which provides an identical service to working professionals, and acquired e-commerce loan company CashCare on Tuesday. EasySalary charges an annualized interest rate of 30%, which while lower than KreditBee’s, far exceeds that charged by credit cards. EasySalary argued that it doesn’t make sense to annualize short-term loans, since the maximum duration of its loans is usually 3 months, and therefore the interest payment works out to far less than the annualized rate on the principal.

Other apps that provide the same service include CASHe, LoanMeet and Vola — the latter of which recently got a $500,000 investment from a Mexican investment firm. Companies like KreditBee and Vola use AI and social media data to determine the creditworthiness of users, as opposed to traditional lenders who use collateral and CIBIL scores. KreditBee is probably the first to get access to the rich range of data available to Xiaomi, and while it is unclear just how much data uniquely available to Xiaomi will be leveraged by KreditBee, the partnership marks a new milestone in the young but rapidly growing app-based personal lending space in India.

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