With an aim to help small and medium businesses (SMBs), social media giant Facebook on Friday launched ‘Small Business Loans Initiative’, for the SMBs that advertise on its platform to get quick access to credit through independent lending partners. India is the first country where Facebook has rolled out this program. The programme is open to businesses registered across 200 towns and cities of India.

The social conglomerate said its new program, called Small Business Loans Initiative, addresses some of the biggest pain points small businesses face when securing loans.

The company, which last year announced a $4.3 million grant for small businesses in India, said the new program will allow its lending partners to grant small ticket loans — ranging between 500,000 Indian rupees ($6,720) to 50,00,000 ($67,200) — at a predefined interest rate of 17%-20% per annum and won’t require the businesses to provide any collateral or joining fee, the firm told TechCrunch.

 

  • Indifi is the first lending partner that Facebook has tied-up with and the program is built with the potential to bring more partners on board. 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.
  • Through Facebook’s partnership with Indifi, small businesses that advertise with Facebook can get loans at a predefined interest rate of 17 per cent to 20 per cent per annum.
  • The program will also enable small businesses to apply for loans without collateral through a quick online application. Small businesses applying under this program will not be charged a processing fee by Indifi.
  • Indifi will also disburse the loan amount within five working days of the borrower completing all documentation formalities after acceptance of the offer by Indifi.
    Many small businesses face challenges in securing loans of lower ticket-size as they are not viable for many lenders. Through this program, small businesses can get loans between INR 5 lakh and – INR 50 lakh.
  • Facebook is also committed to enabling opportunities for women-led businesses in India to thrive and grow.
  • 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.
  • This first-of-its-kind India-first initiative is yet another step by Facebook to create a strong ecosystem for small businesses growth in the country.
  • The program is a completely not-for-profit arrangement with Facebook’s lending partners and small businesses are not obligated to spend their loan amount on Facebook advertising.