Srinagar, Aug 20: Facebook India on Friday announced a new programme called the “Small Business Loans Initiative”, in partnership with online lending platform Indifi, to help small and medium businesses (SMBs) that advertise on Facebook to get quick access to credit through independent lending partners.
India is the first country where Facebook is rolling out this programme. It is open to businesses registered across 200 towns and cities of India.
The initiative was announced 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).
Terms and conditions of the initiative
Those interested can read more details about the terms and conditions and how all it is going to work here:
The goal of the initiative is to make business loans more easily accessible to small businesses, and reduce the credit gap within India’s MSME sector, the technology giant said at its launching website.
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.
“Facebook is deeply committed to creating economic opportunities for India’s small businesses. Access to timely capital is more important than ever as it can help them jump-start their recovery and drive big growth…As a company, we are at the spear end of the digital transformation and we believe that the Small Business Loans Initiative can provide big impetus to early entrepreneurs to fuel their ideas and their appetite for taking risks,” said Ajit Mohan, vice president and managing director, Facebook India.
Indifi is the first lending partner that Facebook has tied up with and the programme is built with the potential to bring more partners on board.
Through Facebook’s partnership with Indifi, small businesses that advertise with Facebook can get loans at a predefined interest rate of 17-20 per cent per annum. The programme will also enable small businesses to apply for loans without collateral through a quick online application.
Small businesses applying under this programme will not be charged a processing fee 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 made by the lending firm.
Many small businesses face challenges in securing loans of lower ticket-size as they are not viable for many lenders. Through this programme, small businesses can get loans between Rs 5 lakh and 50 lakh.
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.
Mohan said that Facebook will not be monetising this partnership, and will help connect small businesses with Indifi. The businesses will also have no obligation to advetise on Facebook or its companies as part of this initiative.