In the last one year, Facebook has taken numerous steps to support the economic recovery of small businesses.
Social media giant Facebook India on Friday launched the ‘Small Business Loans Initiative’, to help small and medium businesses (SMBs) that advertise on Facebook to get quick access to credit through independent lending partners, with Indifi as its first lending partner.
India is the first Facebook country where this programme is getting rolled out and is open to businesses registered across 200 towns and cities of India.
Speaking at the event, Ajit Mohan, VP and MD Facebook India said, “More than a third of the small businesses whom we spoke to said that cash flow was a big challenge for them. Access to timely capital is more important than ever as it can help them jumpstart their recovery and drive big growth. The challenges around securing credit and timely credit inspired us to design this programme,” he stated.
The announcement came at a virtual event – ‘Enabling MSME Growth through Financial Inclusion’- hosted by Facebook India in partnership with Federation of Indian Chambers of Commerce & Industry (FICCI).
Explaining the features of the programme further, Mohan said that there are five key unique elements designed as a part of the initiative. “There is no collateral needed and the disbursement process is fast. The interest range is pre-defined between 17-20% per annum. Then there is a broad spectrum of Rs 5 lakh – Rs 50 lakh in loans, which implies solutions for different businesses. Besides this, it will enable more women-led businesses in India – 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,” he added.
There will also be on call support with Indifi available for those who want to reach out post their application process.
Mohan highlighted that Facebook will not be monetising this partnership and hoped for further growth of the SMB ecosystem. “We hope this becomes the trigger for companies looking at different models and that this will spurt the movement towards expanding access to credit for small businesses in India,” he said.
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.
Delivering the keynote address, Amitabh Kant, Chief Executive Officer, Niti Aayog said that MSMEs will play a significant role in reviving India’s economic growth and achieving its vision of becoming more self-reliant. “Digital transformation will act as a catalyst for India’s development story going forward, and access to finances will be crucial to this transformation. In this context, Facebook’s Small Business Loans initiative is a big step in the right direction.”
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. With the Small Business Loans Initiative, Facebook hopes to further catalyze the growth of micro, small, and medium enterprises in India.