Facebook India has launched a new programme called ‘Small Business Loans Initiative’, which partners with Indifi online lending platform to promote small and medium-sized businesses (SMBs) on Facebook through independent lending partners. It is a pivotal move to help small businesses get credit quickly.
India is the first country where Facebook has launched the programme. It is open to companies registered in 200 cities and towns in India.
What is Facebook’s Small Business Loans Initiative?
Facebook’s Small Business Loans Initiative aims to give small businesses access to business loans and narrow the credit gap in the Indian SME sector. This programme allows SMEs to obtain loans between Rs. 5 to Rs. 50 lakh in 200 cities across India.
Getting a loan on time is especially difficult for small businesses that are just starting or have a bad credit history. Facebook’s strategic partnership with Indifi is critical in resolving that hurdle. Indifi is a major digital lending platform for providing business loans to Indian SMEs and Facebook’s partner in providing loans to small businesses. The initiative is set up with the potential to draw more partners.
Facebook's Small Business Loans Initiative allows small businesses to apply for a loan through a direct online application and without collateral.
The move comes months after the government introduced new social media and OTT laws for all tech companies operating in India. With this, Facebook has shown its commitment to creating financial opportunities for Indian enterprises.
SMEs and SMBs working on using Facebook as a business platform
As per a survey done last year by Facebook in collaboration with the Organization for Economic Co-operation and Development (OECD) and the World Bank, in 2020, almost one-third of small and medium-sized businesses operating on Facebook cited cash flow as their most significant problem in working. The small business loans initiative is designed with these figures in view.
India has 1.5 million (15 lakh) SMB Facebook pages, and such businesses on Facebook have grown more than 70% year over year. Through Facebook’s collaboration with Indifi, small businesses that promote with Facebook can get credit loans at a predetermined interest rates of 17-20 per cent annually.
Facebook’s Small Business Loans Initiative was featured in the “Enabling MSME Growth through Financial Inclusion” online event hosted together by Facebook India and the Federation of Indian Chambers of Commerce and Industry (FICCI).
FICCI praised Facebook’s efforts to provide small, medium and micro businesses with the right opportunities, skills and solutions. The commerce body supports closer partnerships with the private sector to develop Indian MSMEs. It backs companies like Facebook that are helping small businesses and making it easier for them to get credit access.
How can businesses get benefits from this initiative?
Indifi will not charge small businesses enrolling in Facebook’s Small Business Loans Initiative a processing fee. Indifi will make the funds available within five business days of receiving the small business application and all completed paperwork.
Many small businesses find it challenging to get low-budget loans because they cannot convince lenders of their repaying credibility and business mettle. But small businesses can get loans between Rs. 5 lakh and Rs. 50 lakh through this programme. Small companies, wholly or partly owned by women, can also get a 0.2% discount on Indifi lending rates.
Moreover, Facebook will not be monetising this partnership and will help connect small businesses with Indifi. At this point, companies seeking aid do not need to advertise on Facebook, thus making the assistance smoothly available. This is undoubtedly a promising phenomenon for small and medium-sized enterprises and new entrepreneurs looking to fuel their ideas in the current economic climate.