- Thursday, April 25, 2024
By: Shilpa Sharma
FACEBOOK India has launched ‘Small Business Loans Initiative’ to help small and medium businesses (SMBs) that advertise on its platform to get quick access to credit through independent lending partners.
India is the first country for the Facebook to roll out this programme, which is open to businesses registered across 200 towns and cities in the country.
The aim of this initiative is to make business loans easily accessible to small entrepreneurs, and reduce the credit gap within India’s MSME (micro, small and medium enterprises) sector, Facebook India vice-president and managing director Ajit Mohan said on Friday (20).
“It’s going to be an arm’s length relationship with reputable and reliable lenders, but within the construct of a programme that has been co-designed with Facebook… Indifi is the first lending partner and the idea is that as we scale, others can follow,” Mohan said.
He emphasised that there is no revenue share for Facebook in the programme, and that SMEs will have no obligation to spend the loan proceeds on the platform.
Mohan also said that all decisions related to the loans – including approval, disbursement and recovery – will be made by Indifi.
Under this initiative, small businesses that advertise with Facebook can get loans between Rs 500,000 (£4,935) and Rs 5 million (£49,357) at a predefined interest rate of 17-20 per cent per annum and applicants will not be charged a processing fee by Indifi.
Indifi will disburse the loan amount within five working days of the borrower completing all documentation formalities after acceptance of the offer by Indifi.
Besides, small businesses that are wholly or partly women-owned can get a special 0.2 per cent reduction per annum on the applied loan interest rate from Indifi.
“Access to credit continues to be one of the big important factors driving and impacting the growth of MSMEs. Independent research shows that Indian MSMEs face huge challenges in securing timely financing and that curtails the growth opportunities,” Mohan said.
In the last one year, Facebook has taken numerous steps to support the economic recovery of small businesses. Some of these include offering grants to small businesses, and expanding the company’s industry-leading skilling initiatives to support the offline to online journeys of small businesses.
