The International Finance Corporation (IFC) a member of the World Bank Group, has proposed to offer an RMB-denominated senior loan of up to RMB 800 million ($120 million) to Chongqing Xiaomi Microfinance Co Ltd (Xiaomi MCC), a wholly-owned entity of Chinese mobile technology company Xiaomi Corporation.
The three-year loan offering will come from IFC’s own account and will be used by Xiaomi MCC to expand its lending business.
The microfinance company claims to use a Big Data-based credit assessment methodology to provide consumer loans and instalment loans across China and is looking to expand its product offerings to micro, small, and medium enterprises.
“The proposed investment is expected to support big-data based microlending to efficiently tap underserved MSMEs in lower tier segments,” IFC said in its disclosure.
The loan will be the first long-term financing for the company which will help it access diversified funding sources and to better manage maturity mismatch, it added.
The investment will also be used by Xiaomi MCC for cross-border expansion as it seeks to extend its services offerings to the countries where parent company Xiaomi already has a footprint.
Established in 2015, Xiaomi MCC is an entity of Xiaomi Finance Inc and Xiaomi Finance HK Limited, under Xiaomi Corporation, founded by Lei Jun in 2010. The corporation, which develops smartphones and smart devices as well as other Internet services, raised $4.72 billion in an initial public offering on the Hong Kong Stock Exchange this June in one of the most high-profile IPOs this year.