India's investment policy upsets Xiaomi, Oppo's consumer finance plans

The Chinese phone brands, are keen to establish their own NBFC which will help improve margins by allowing them to directly sell financial products to their consumers

Tougher scrutiny of foreign investment in India has soured the plans of China's smartphone manufacturers seeking to expand beyond selling hardware for a bigger share of the South Asian country's competitive financial services market.

Xiaomi and Oppo, with more than 100 million in combined smartphone users in India, cannot directly lend to consumers without a shadow banking licence and have partnered with Indian financial companies to provide the funds for services offered on their platforms.

Xiaomi in December launched its online lending service MiCredit in India, connecting users with Indian lending firms to access small loans. By the end of