The scale of India’s digital credit market will reach US $1 trillion, and Xiaomi FB will test the water one after another


Tencent technology news on August 31, India’s digital credit market is becoming a battlefield for companies such as Facebook and Xiaomi, which seek to gain a foothold in this $1 trillion industry.
Facebook said this month that India would become the first country in the world to launch a small business loan program. The program provides loans to companies that advertise on their platforms through partners. The loan amount ranges from 500000 rupees (about US $6720) to 5 million rupees (about US $67200), the interest rate is 17% – 20%, and there may be no collateral.
Press Trust of India quoted manu Jain, the local head, as saying that Xiaomi, a Chinese manufacturer of smart phones, rice cookers, game monitors and other products, plans to cooperate with some of India’s largest banks and start-up digital banks to provide loans Credit card and insurance products.
Meanwhile, Amazon made its first investment in financial management in India this month and participated in the financing of US $40 million by financial technology start-up smallcase technologies. Google, owned by alphabet, is also actively expanding in India’s Internet financial market. Following the provision of digital gold, mutual funds and other financial products on its popular Google payment platform, the company now cooperates with small Indian banks to open time deposits for its customers.
India’s digital payment market is attracting the attention of some technology giants. During the novel coronavirus pneumonia epidemic, online trading in India surged, and traditional banks became cautious after the increase in bad debts. According to the estimates of Boston Consulting Group, India’s digital loans are expected to triple to US $350 billion by 2023, and reach US $1 trillion in five years since 2019.
Saurabh Tripathi, managing director and senior partner of BCG’s financial institutions business, said: “the payment business makes almost no money, but the credit business makes a lot of money. Indian consumers are waiting to design a more appropriate digital experience, and many enterprises are seizing this opportunity. ”
Although India’s loan market has great potential, it also has great risks. It is expected that by March, India’s non-performing loan ratio will rise to 11.3%, becoming the worst performing country among major countries for the second consecutive year. In addition to solving the problem of loan collection of digital companies, the Reserve Bank of India also plans to supervise online lending institutions, including more than 300 start-ups´╝ł Tencent Technology (compiled / Mowgli)