Facebook is launching a new program in India to help SMEs obtain loans in the South Asian market as the company works hard to expand your presence among traders…
The social conglomerate announced its new program called Small Business Lending Initiative, eliminates some of the most serious problems faced by small businesses when obtaining loans.
The company that announced last year $ 4.3 Million Grant for Small Business in India, said the program will allow its lender partners to provide small loans – from INR 500,000 (USD 6,720) to USD 50,000,000 (USD 67,200) – at a predetermined interest rate of 17-20% per annum and will not require from businesses to provide a deposit at the time of application.
At the time of launch, the pilot credit partner of the company is Supported by CDC Group, Gurgaon, Indifi Headquarters, which will repay the loan amount within five working days after the borrower completes all formalities after accepting the Indifi offer.
Facebook said it works “at arm’s length” with its loan partners, but those partners will handle all the risks associated with loan repayments and determine eligibility criteria.
Facebook, for its part, is informing businesses about the lending program and is working to improve the underlying lending structure, such as interest rate boundaries, the responsiveness of interaction between the loan partner and businesses (on the same day of application) and the ticket size of the loan amount.
During a telephone conversation with reporters on Friday, Facebook India CEO Ajit Mohan said small businesses in 200 Indian cities could apply for a loan.
Enterprises fully or partially run by women will be able to obtain loans at a special rate of 0.2% per annum.
This is the first time Facebook has launched such a program in any market, the company told TechCrunch.
According to a survey conducted by Facebook in collaboration with the OECD and the World Bank last year, almost a third of operating small and medium enterprises on Facebook in 2020 said they believed cash flow would be one of their main concerns.
The company does not monetize this program. “We believe it is in our personal best interest to ensure the massive growth of the small business ecosystem in India, because as a company we are playing it in the long run. We will get a disproportionate benefit because most of this small business activity happens in our applications as they grow, ”Mohan said.
“We are not going to make money from this program. We do not have a revenue sharing agreement. We do not impose any restrictions on how this money is spent, ”he said. “Frankly, we also hope that other companies will also create programs based on such a program so that there is more access to credit in the market. It will be good for all of us. There is no transactional purpose here. “
This is an evolving story. Subscribe more …