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Facebook Launched Small Business Loans Initiative in India

Small Business Loans

Good News! Facebook started Small Business Loans drive across 200 cities in India on August 20. This allows small and medium businesses to avail loans ranging from Rs 5 to Rs 50 lakh.

Facebook has partnered with Indifi, a lending platform, for loan disbursal to start this project. Moreover, India is the first country where the plan has been launched. Ajit Mohan, Vice President, and Managing Director of Facebook India, announcing the launch of the initiative said to “the media that there is no collateral required for the loan that comes with a pre-defined interest rate of 17-20 percent within five days. For women-led-business, there is a 0.2 percent reduction in interest rate as well”.

Mohan said that the main motto of this initiative is to address the challenge of getting access to credit faced by the small and medium enterprises (SMEs) in the country. The social media giant announced that it was offering $100 million to help small businesses. The initiative was taken in 30 countries including India in order to help them cope with the economic impacts of the COVID-19 pandemic. As per the reports, almost $4 million were deployed to 3,000 Indian SMBs across the five cities, Gurgaon, Mumbai, New Delhi, Hyderabad, and Bengaluru.

Indifi is in charge of taking the primary decision on the loan disbursal and also recovering the loans. Mohan expects other players to come on board and join them so that more capital can be available in the market.

“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.

“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.

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