A piece of good news for Indian entrepreneurs as Facebook launches ‘Small Business Loans Initiative’ in India. This Initiative is currently exclusive to Indian Small Enterprises. The initiative will have a significant impact on MSMEs and thus on the Indian Economy as well. In this article, we shall discuss the latest news by Facebook launching the ‘Small Business Loans Initiative’ in India.
Facebook Launches ‘Small Business Loans Initiative’ In India
In its first worldwide project, Facebook Inc. has started giving loans to several advertisers on its platform.
The loans are subject to a fixed interest rate of 17-20 percent. However, companies owned either partially or entirely by women will get loans at a reduced rate of 0.2 percent.
India is the only country as of now where this program is launching. The Loans Initiative by Facebook will be available to registered businesses across 200 towns and cities of India.
Facebook partners with Indifi
Facebook has partnered with Indifi, a digital firm, with over 340 million customers. It is the biggest lending company globally and in India too.
Indifi will decide on borrowers’ qualifying requirements, such as creditworthiness, and the risk of credit defaults. Therefore, businesses wanting to avail of the loans might also compel to have GST Registration, MSME Registration, or Company Formation.
The company already provides small businesses with zero collateral loans but its collaboration with Facebook will allow it to reach more borrowers in India.
The motive of the collaboration as Facebook Launches ‘Small Business Loans Initiative’ In India
The main goal of this initiative is to reduce the credit gap within MSMEs and make loans more accessible to small entrepreneurs as stated by Ajit Mohan (Managing Director) at Facebook in India.
Mohan also states that about 4 million dollars were spent on incentives for over 3,000 SMBs throughout Delhi, Gurgaon, Hyderabad, and Bengaluru.
The firm will not decide who qualifies for loans or recapitalization. Instead, Indifi will assess the company and carry the risk of financing.
Moreover, He stated that there is no limit to the number of company loan payments. In addition, Facebook is also hoping to cooperate on these projects with other insurance carriers in the future.
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