For the first time, Facebook India launches loans programme for small businesses
On Friday, Facebook announced a new programme named "Small Business Loans Initiative", in collaboration with online lending platform Indifi, to assist small and medium businesses (SMBs) that are trying to expand through advertising on Facebook and to get quick access to credit through independent lending partners.
India is the first country where Facebook is rolling out this programme. The programme welcomes businesses registered across 200 towns and cities in India.
Indifi is the first-ever lending partner that Facebook has tied up with and the programme is developed with the calibre to bring more partners on board.
The aim of the initiative is to make business loans feasible and easily accessible to small businesses, and bridge the credit gap within India’s MSME sector, the technology giant said.
As per the "Future of Business" survey conducted by Facebook in partnership 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 obstacles.
Getting access to timely credit is specifically challenging for micro and small businesses that are in their budding stage and might not have a long credit history.
Through this initiative of Facebook’s partnership with Indifi, small businesses that advertise with Facebook can avail loans at a predefined interest rate of 17-20 per cent per annum. The programme will also encourage small businesses to apply for loans without collateral through a short and quick online application.
““FICCI lauds Facebook's efforts of empowering the MSME sector with the right opportunities, skills, and solutions. FICCI has always advocated for stronger private sector participation for the growth of India’s MSMEs and welcomes the launch of Facebook's Small Business Loans Initiative to make access to credit more easily available to the industry," said Uday Shankar, President, FICCI.
Small businesses applying under this programme will be exempted from the processing fee charged by Indifi, which will also disburse the loan amount within five working days of the borrower completing all documentation formalities after acceptance of the offer presented by the lending firm.
Many small businesses face this major challenge in securing loans of lower ticket size as they are not viable and trustworthy for many lenders. Through this programme, small businesses can get loans ranging between Rs 5 lakh and 50 lakh.
Small businesses that are wholly or partly women-owned can avail up to 0.2 per cent reduction per annum on the levied loan interest rate from Indifi.