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Facebook India Launches New Initiative That Aims To Help Small, Medium Business Acquire Loans
22 Aug, 2021 / 09:42 AM / OMNES Media LLC

Source: https://in.mashable.com/

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Facebook India has announced the launch of a new program geared towards aiding small and media scaled businesses get quick credit.

The social media giant's ‘Small Business Loans Initiative’ will help small and medium businesses (SMBs) that advertise on Facebook get quick access to credit through independent lending partners. Lending partners? Well, at launch, Indifi is the first lending partner that Facebook has tied-up with and the program is built with the potential to bring more partners on board.

The goal of the initiative is to make business loans more easily accessible to small businesses, and reduce the credit gap that exists within India’s MSME sector.

India is the first country where this program is getting rolled out, so this is a very fresh initiative for Facebook. The program is open to businesses registered across 200 towns and cities of India.

 

According to the ‘Future of Business’ survey conducted by Facebook in collaboration with OECD and the World Bank last year, almost a third of operational SMBs on Facebook in 2020 said that they expected cash flow to be one of their primary challenges. Getting access to timely credit is particularly challenging for micro and small businesses that have just started out and might not have a long credit history.

 

Through Facebook’s partnership with Indifi, small businesses that advertise with Facebook can get loans at a predefined interest rate of 17%-20% per annum. The program will also enable small businesses to apply for loans without collateral through a quick online application. Small businesses applying under this program will not be charged a processing fee by Indifi.

Indifi will also disburse the loan amount within five working days of the borrower completing all documentation formalities after acceptance of the offer by Indifi. Many small businesses face challenges in securing loans of lower ticket-size as they are not viable for many lenders. Through this program, small businesses can get loans that amount anywhere between INR 5 lakh and - INR 50 lakh.

Facebook is also committed to enabling opportunities for women-led businesses in India to thrive and grow. Small businesses that are wholly or partly women-owned can get a special 0.2% reduction per annum on the applied loan interest rate from Indifi.

The social media giant also mentions that the program is a not-for-profit arrangement with Facebook’s lending partners. This also means that small businesses are not obligated to spend their loan amount on Facebook advertising.