Facebook, a company that started off as a way for Mark Zuckerberg to make friends, has expanded into one of the biggest conglomerates this planet has ever seen, reaching a trillion dollar (that’s with a t) valuation this year. However, much like every other tech company, it wants to turn into a fintech firm, which is why it has been launching new features every month to find other ways of monetization than plain and simple ads. Today, it has announced that it is launching a program for small and medium scale businesses in India to help them secure loans.
While this sounds like a weird turn to take for a social media company, it’s really not. Facebook has been trying to capitalize on the growing community of small and medium businesses on its platform, and this move is in line with its vision for what the platform could be.
Termed by “Small Business Loan Initiative,” this program will help businesses secure capital in the window of ₹500,000 ($6,720) to ₹50,00,000 ($67,200) at an annual interest rate of 17 to 20%. However, for businesses run fully or partially by women, the company will offer a 0.2% discount on the interest rate.
The best part? Businesses availing this facility will not have to present any collateral or pay any type of joining fees. Instead, the lending partner Indifi, a CDC backed Gurgaon based firm, will evaluate an applicant’s eligibility and disburse the amount within 5 days. Over time, Facebook aims to introduce more lending partners to this initiative.
Facebook India head Ajit Mohan has said the small businesses in 200 Indian cities can apply for the loan.
Last but not least, for the time being, Facebook will not be monetizing this program.
“We believe it is in our self-interest for there to be massive growth in the small business ecosystem in India because as a company we are playing this for the long term. We will disproportionately benefit because a lot of these small business activity happens on our apps as they grow,” said Mohan.
For now, the goal of the program is to help provide easy capital to companies, which still remains one of the biggest issues for businesses in India.
