As the company pushes further to expand its presence among merchants, Facebook is launching a new program to lend small and medium-sized businesses in India.
The community’s new program, Small Business Loan Initiative TV, looks at some of the major ills that small businesses face when they receive loans.
The company, which announced a $ 4.3 million grant for small businesses in India last year, will allow its creditors to offer small ticket loans – from 500,000 Indian rupees ($ 6,720) to 50,00,000 ($ 67,200) – at an earlier rate of 17% per annum. 20% and the businesses do not require any warranty or merger payment, the company told Tech Crunch.
At the start of the project, the company’s pilot lender is a CDC-supported Gurgaon head office, which provides the loan to the lender within five working days after receiving all the documentation requirements. The company expects many partners to join the program.
He said Facebook was working with its lenders “at arm’s length”, but those partners took all the risks of lending and determined eligibility requirements. (The company said on its Facebook page that one of the requirements for a business to qualify is to notify the Facebook app family for at least 180 days.)
Facebook, on the other hand, is working to make businesses aware of the loan program, working to improve interest rates such as interest rates, participation between the lender’s partner and businesses (including call support system on application date) and loan amount.
Facebook CEO Ajit Mohan told reporters on Friday that small businesses in 200 Indian cities could apply for the loan from today.
Businesses that are fully or partially managed by women can also secure loans at specially discounted 0.2% per annum.
This is the first time Facebook has launched such a program in any market, the company told Tech Crunch.
According to a survey conducted by Facebook in collaboration with OEDD and the World Bank last year, By 2020, one-third of small and medium-sized businesses on Facebook expect cash flow to be one of their biggest challenges, he said.
No income generation
The company is not generating revenue through this program. We believe that the big growth in the small business environment in India is in our interest because we, as a company, have been playing this game for a long time. We use less because many of these small businesses occur on our apps as they grow. ”
We are not looking to make money from this program. We do not have a revenue sharing agreement. We will not restrict how this money is spent. ” In fact, we hope that behind such a program, other companies will also create programs to access credit in the market. That will be good for all of us. There is no marketing purpose here. ”
For Facebook, Friday’s announcement is the latest in a series of South Asian efforts to find small and medium-sized businesses. Last year, India, the world’s largest consumer market, invested $ 5.7 billion in technology giants in India, among other things.
“MMSEs will play a significant role in reviving India’s economic growth and achieving a vision of greater self-confidence. “Digital transformation will serve as a catalyst for India’s future development, and financial transformation will be critical to that change.” Amy Friday, CEO of Nati Ayog, a highly influential government-backed think tank.
In this context, Facebook’s small business loan initiative is a big step in the right direction and I am happy to see that the company is the first India to start such an initiative.