India is the first Facebook country where this program is deployed and is open to registered businesses in 200 Indian cities.
Speaking at the event, Ajit Mohan, vice president and general manager of Facebook India, said: âMore than a third of the small businesses we spoke to said cash flow was a big challenge. for them. Access to timely capital is more important than ever, as it can help them jump-start their recovery and generate significant growth. The challenges of getting credit and getting credit in a timely manner inspired us to design this program, âhe said.
The announcement came during a virtual event – âEnabling MSMEs Growth Through Financial Inclusionâ – hosted by Facebook India in partnership with the Federation of Indian Chambers of Commerce and Industry (FICCI).
Explaining further the features of the program, Mohan said there are five unique key elements designed under the initiative. âNo collateral is needed and the disbursement process is quick. The interest range is predefined between 17-20% per annum. Then there is a wide range of Rs 5 lakh – Rs 50 lakh of loans which involves solutions for different companies. In addition to this, this will allow more women-led businesses in India – small businesses wholly or partially owned by women can benefit from a special reduction of 0.2% per annum on the applied interest rate. on Indifi loans, âhe added.
There will also be on-call support with Indifi available for those who wish to contact after their application process.
Mohan stressed that Facebook would not monetize this partnership and hoped for further growth in the SME ecosystem. âWe hope this becomes the trigger for companies considering different models and stimulates the movement towards expanding access to credit for small businesses in India,â he said.
According to the âFuture of Businessâ survey conducted by Facebook in collaboration with the OECD and the World Bank last year, nearly a third of SMEs operating on Facebook in 2020 said they expected cash flow is one of their biggest challenges.
In the opening speech, Amitabh Kant, CEO of Niti Aayog, said that MSMEs will play an important role in boosting India’s economic growth and realizing its vision of becoming more self-reliant. âDigital transformation will act as a catalyst for India’s development story going forward, and access to finance will be crucial for this transformation. Against this backdrop, Facebook’s small business loan initiative is a big step in the right direction.
Over the past year, Facebook has taken many steps to support the economic recovery of small businesses. Some of these include the provision of small business grants and the expansion of advanced business skills initiatives to support small business offline to online travel. With the Small Business Loans Initiative, Facebook hopes to further catalyze the growth of micro, small and medium enterprises in India.