Microblogging site Facebook on Friday launched the small business loan initiative by tying up with lenders. Small and medium enterprises that advertise on Facebook can approach these lenders.
Indifi is the first lending partner that has signed up with Facebook for the initiative. Through this program, small businesses can get loans between Rs 5 lakh and Rs 50 lakh.
“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”, Facebook said in a statement.
India is the first country where this program is getting rolled out. It is open to businesses registered across 200 towns and cities in the country.
“Access to timely capital is more important than ever as it can help them jump-start their recovery and drive big growth”, Ajit Mohan, VP and MD Facebook India, said.
“The country has made tremendous progress in the last few years in expanding access to credit. As a company, we are at the spear end of the digital transformation and we believe that the Small Business Loans Initiative can provide big impetus to early entrepreneurs to fuel their ideas and their appetite for taking risks”, he added.
During the pandemic, Facebook has been one of the portals small and medium enterprises have been using to advertise.
Through Facebook’s partnership with Indifi, small businesses that advertise with Facebook can get loans at a predefined interest rate of 17%-20% 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, Facebook’s statement said.
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.
Small businesses that are wholly or partly women-owned can get a special 0.2% reduction per annum on the applied loan interest rate from Indifi.