Facebook launches ‘Small Business Loans initiative’ in India for SMEs

Facebook India on Friday launched the ‘Small Business Loans Initiative’ to help small and medium businesses (SMBs) in India.

The company has partnered with Indifi, a lending platform, for loan disbursal. India is the first country where Facebook is rolling out this programme.

Through Facebook’s partnership with Indifi, small businesses that advertise with Facebook can get loans between Rs 5 lakh and Rs 50 lakh at a predefined interest rate of 17-20 percent per annum and applicants will not be charged a processing fee by Indifi. For women led-business, there is a 0.2 percent reduction in interest rate as well.

The goal of the initiative is to make business loans more easily accessible to small entrepreneurs, and reduce the credit gap within India’s MSME (micro, small and medium enterprises) sector, Facebook India Vice-President and MD Ajit Mohan told reporters in a virtual briefing.

“It’s going to be an arm’s length relationship with reputable and reliable lenders, but within the construct of a programme that has been co-designed with Facebook. Indifi is the first lending partner and the idea is that as we scale, others can follow,” he added.

“The role we are playing is engaging with small businesses, who advertise on Facebook and therefore we are aware of growth opportunities that are constrained by lack of access to capital. We have the opportunity to let them know that there is access to this through the partner,” Mohan explained.

According to Mohan, Facebook’s self-interest here is for the small and medium business ecosystem to grow massively, which in turn will also help the company as well.

“What we are getting in return is that we hope some of these companies will go on to become extremely successful global businesses and most of them will become very successful national businesses. I think that is good for us and also the economy as well,” he added.