Facebook is teaming up with Indifi, an Indian online lender to help create loans for small domestic businesses through the SMB Loan Program. Read to know how this initiative will bring more local businesses as advertisers.
What is this new program all about?
With this new program, Facebook is planning to offer loans ranging from Rs. 500,000 to Rs. 5 million. Moreover, interest rates for small and medium-sized businesses (SMB) will top off at 20 percent. The SMB Loan Program will be available to businesses across 200 municipalities. Additionally, it is open to those SBMs that have used Facebook or related apps to advertise for at least six months.
SMB Loan Program: Not a financial strategy
“We’re not looking to make money from this program, we don’t have any revenue share … but we are hoping this creates growth in the industry that will eventually benefit us,” said Ajith Mohan. Mohan is the Vice President and Managing Director for Facebook’s India division. Mohan clarified that this is not a financial strategy. He also highlighted that over 15 million businesses are using the newly launched WhatsApp Business Platform. WhatsApp has plans to strengthen its connection with banks to offer pensions and insurance to people in the near future.
However, the social media giant will stay at arm’s length from the loan and lending process, clarified Mohan. Additionally, they will also have no say in who is and is not eligible for the loan. The evaluation and process will be managed by Indifi. “While the rationale for the SMB grant was rooted in the financial crisis that occurred as a result of the pandemic, we are deeply aware that there are other structural challenges that have been around for a long time — particularly related to credit and funding,” he added.