FB rolls out small biz loans for SMBS

Facebook India on Friday announced a “Small Business Loans Initiative”, in partnership with online lending platform Indifi, for small and medium businesses (SMBS) that advertise on the social media site.

India is the first country where Facebook is rolling out the programme, which will be open to businesses registered across 200 towns and cities. During a virtual briefing explaining the programme, Ajit Mohan, vice-president and managing director, Facebook India, said about 200 million businesses use the Facebook family of apps, including Instagram and Whatsapp, and a majority of these are in 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. The aim of the scheme is to make loans more easily accessible to small businesses, and reduce the credit gap within India’s MSME sector, the technology giant 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 they expected cash flow to be one of their primary challenges.

Through the scheme, small businesses that advertise on Facebook can get loans at a predefined interest rate of 1720 per cent per annum. The programme will also enable small businesses to apply for loans without collateral through a quick online application.

“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 jumpstart their recovery and drive growth... as a company, we are at the spear end of the digital transformation and believe that the Small Business Loans Initiative can provide a big impetus to entrepreneurs to fuel their ideas and their appetite for risks,” said Mohan.

Delivering the keynote address at a virtual event “Enabling MSME Growth through Financial Inclusion” hosted by Facebook India in partnership with the Federation of Indian Chambers of Commerce & Industry (FICCI), NITI Aayog CEO Amitabh Kant said, “The government is committed to creating an environment for MSMES in the private sector to thrive. The private sector also will have to work together to help the various MSMES across the value chain, adapt to the latest technologies and new business processes.”

“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 the initiative,” said Uday Shankar, president, FICCI.

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 company.