FB teams up with Indifi to help small businesses
NEW DELHI: Facebook is partnering with an Indian online lending firm to help provide loans to small domestic businesses, its country head said on Friday, as part of a push to bring more businesses to advertise on its platform.
The social media giant is joining hands with Indifi to help provide loans ranging from ₹500,000 to ₹5,000,000 at annual interest rates of up to 20%, Ajit Mohan, Facebook India’s managing director, told a virtual news conference.
Facebook said it would pay off to bolster the small business economy in India as these companies will use its apps including Instagram and WhatsApp to boost their growth.
“We’re not looking to make money from this programme, we don’t have any revenue share... but we are hoping this creates growth in the industry that will eventually benefit us,” said Mohan, adding that Facebook had no monetary contribution towards the programme.
The loans are available to small businesses that have been advertising on Facebook or its group apps for at least 180 days. And, the programme could help drive more such firms to advertise on the social network and its apps which are highly popular in India.
Facebook, on its part, is making businesses aware of the lending program and has worked to improve the underlying lending framework such as boundaries for interest rate, engagement responsiveness between the lending partner and businesses (there will be an on-call support system within one day of applying) and ticket size of the credit amount.
In a call with reporters on Friday, Mohan said that small businesses in 200 Indian cities can apply for the loan starting today.
Businesses wholly or partially run by women will additionally be able to secure the loan at a special 0.2% reduction rates per annum.
Friday’s announcement is the latest in a series of efforts it has made to tap the South Asian nation’s small and medium-sized businesses.
India is a key growth market for Facebook with more than 410 million users, and its WhatsApp messenger counts the South Asian country as its biggest market with over 530 million users. Instagram has over 210 million users in India, also benefiting from a ban on Chinese short video platform TikTok last year.
Last year, Facebook invested $5.7 billion in billionaire Mukesh Ambani’s Jio Platforms digital unit, which will allow WhatsApp to offer payments services to millions of mom-and-pop stores.
Separately, WhatsApp has plans to deepen its partnership with banks to offer financial services such as pensions and insurance.
According to a survey conducted by Facebook in collaboration with OECD and the World Bank last year, almost a third of operational small and medium-sized businesses on Facebook in 2020 said that they expected cash flow to be one of their primary challenges.