The Chinese technology giant, Xiaomi, has entered the banking arena. Xiaomi is the second-largest investor in the “Sichuan Hope Bank”, holding 29.5% stake. The “Sichuan Hope Bank”, which was approved by the government on Monday, is aimed at younger, Internet-savvy users and small companies. A spokesman for the bank said:

“The Sichuan Hope Bank will become the first mobile internet bank in central western China. It will focus on the needs of the younger demographic and small enterprises.”

According to a filing to the Shenzhen Stock Exchange, other stakeholders in the bank include the Chinese conglomerate New Hope Group, and Chengdu Hongqi Chain, which hold 30% and 15% stake respectively.

Lin Renxiang, an analyst at the Chinese research firm HCR, says Xiaomi has entered banking as it wants to diversify from selling cheap smartphones. He believes that Xiaomi can pull in many of its existing customers to use the bank, and that it may even act as a way to keep customers buying Xiaomi devices when they upgrade their phones, tablets or other devices.

Xiaomi is facing slower smartphone sales growth in China as the market saturates. It has lost its place as the fifth largest global smartphone supplier in the world, being overtaken by the likes of OPPO and vivo earlier this year.

Source: South China Morning Post | Image via CNET