Facebook Offers Loan Upto Rs 50 Lakh For SMEs Across 200 Cities; 17-20% Interest To Be Charged
Facebook operates on a very simple business model. It lets people connect with their fellow mates free of cost and in turn, shows them advertisements. The business owners have a lot of incentives to advertise on Facebook as they get to advertise only on the targeted group in a focused manner. Most of the business’s advertising on Facebook belong to small and medium category. And when the pandemic hit the world, these small businesses simply couldn’t afford to advertise, let alone advertising on Facebook. Obviously, when survival is at stake it would be the last thought to advertise on Facebook right?
These events had a direct impact on Facebook’s revenue. Their finances started dwindling. And now after much of a thought, it seems like the company has come up with a plan to revive the whole ecosystem.
Facebook launches Small Business Loans initiative
On August 20, Facebook launched Small Business Loans initiative to facilitate small and medium businesses to avail loans ranging from Rs 5 to Rs 50 lakh across 200 cities in India. India is the first country in the world where the program has been launched.
For this, Facebook has partnered with Indifi, a lending platform, for loan disbursal.
Ajit Mohan, Vice President, and Managing Director, Facebook India, said 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, a 0.2 percent reduction in interest rate will also be offered.
While the program has been conceptualized by Facebook, Indifi will be taking the key decision on the loan disbursal and recovering.
Playing the role of a big brother
Mohan affirmed that Facebook’s self-interest here is for the small and medium business ecosystem to grow massively, which in turn will help the company as well.
“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 further.
Currently, there are about 200 million businesses globally that use Facebook apps such as Instagram and WhatsApp every month for getting in touch with customers. Out of these, a significant number of businesses are from India. On WhatsApp alone, the company has 15 million business users in India.
So, with this new initiative the company is looking for a win-win future prospectus. Will they succeed in their mission, only time will tell.