Facebook launches ‘Small Business Loans Initiative’ in 200 cities in India
Through Facebook India's Small Business Loans Initiative, small businesses in India that advertise with Facebook will be able to get loans at a predefined interest rate of 17-20% per annum.
Facebook India announced on August 20, 2021, a new programme called “Small Business Loans Initiative”. The programme has been launched in the partnership with online lending platform Indifi, to help Small and Medium Businesses (SMBs) that advertise on Facebook to get quick access to credit through independent lending partners.
India has become the first country where Facebook has launched this programme. The initiative is opened to businesses registered across 200 cities and towns in India.
As per the ‘Future of Business’ survey conducted by Facebook in collaboration with OECD and the World Bank in 2020, almost a third of operational SMBs on Facebook said that they expect cash flow to be one of their primary challenges.
Getting access to timely credit has been particularly challenging for micro and small businesses that just started out and might not have a long history of credit.
With @FacebookIndia’s new Small Business Loans Initiative, our partners can get access to timely credit. Thanks to @amitabhk87 & @ushanx for supporting us on our shared vision of helping small businesses drive big growth in India and around the world. https://t.co/I1BWLzLPdZ— Ajit Mohan (@secondatticus) August 20, 2021
The aim behind launching the ‘Small Business Loans Initiative’ by Facebook India is to make business loans more accessible to small businesses and to reduce the credit gap within India’s MSME sector.
Small Business Loans Initiative by Facebook: Key details
• Through Facebook’s partnership with Indifi, small businesses in India that advertise with Facebook will be able to get loans at a predefined interest rate of 17-20% per annum.
• The Program by the tech giant will also enable small businesses to apply for loans without collateral through a quick online application.
• Small businesses applying under the initiative will not be charged a processing fee by Indifi. The online lending platform will also disburse the loan amount within the five working days of the burrower completing the documentation formalities after the acceptance of the offer made by the lending firm.
• Many small businesses that face challenges in securing loans of lower ticket size will be able to get loans between Rs. 5 lakh to Rs. 50 lakh.
• Small businesses that are wholly or partly owned by women will be able to get a special 0.2% reduction per annum on the applied loan interest rate from Indifi.
Other initiatives by Facebook to support small businesses:
The Vice-President and Managing Director of Facebook India, Ajit Mohan said that the company will not be monetizing this partnership and will help in connecting Indifi to small businesses.
The businesses will have no obligation to advertise on Facebook or its companies as part of the initiative.
Facebook, in the last one year, has taken steps to support the economic recovery of small businesses. Some of these include offering grants to small businesses as well as expanding the company’s industry-leading skilling initiatives to support the offline to online journeys of small businesses.