Facebook announced a new program, the small business loans initiative, to help small and medium businesses (SMBs) in India that advertise on the social media platform to get quick access to credit through lending partners.
The initiative is open to businesses registered across 200 towns and cities of India, the company said in a statement.
The announcement came at a recently held virtual event — Enabling MSME Growth through Financial Inclusion — hosted by Facebook India in partnership with Federation of Indian Chambers of Commerce and Industry (FICCI).
“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,” said Ajit Mohan, VP and MD Facebook India, in the statement.
Facebook has also tied-up with lending partner Indifi to help the SMBs get loans at a predefined interest rate of 17-20 percent per annum, and will not be charged a processing fee.
Many small businesses face challenges in securing loans of lower amounts, but through this program, SMBs can get loans between Rs 5 lakh and Rs 50 lakh.
The new program will help SMBs to apply for loans without collateral through a quick online application and Indifi will disburse the loan amount within five working days of completing all documentation.
Facebook is also committed towards women-led businesses in India. Small businesses that are wholly or partly women-owned can get a special 0.2 percent reduction per annum on the applied loan interest rate from Indifi.
The program is a not-for-profit arrangement with Facebook’s lending partners and small businesses are not obligated to spend their loan amount on Facebook advertising.
