Facebook, a business that started out as a way for Mark Zuckerberg to make friends, has grown into one of the largest conglomerates this planet has ever seen, reaching a trillion dollars (it is with a t) valuation this year. However, just like any other tech company, they want to transform into a fintech company, which is why they are releasing new features every month to find ways to monetize other than simple and straightforward ads. Today, he announced that he is launching a program for small and medium-sized businesses in India to help them get loans.
While that sounds like an odd turn for a social media business to take, it really isn’t. Facebook has tried to capitalize on the growing community of small and medium businesses on its platform, and the move is in line with its vision for what the platform could be.
Called the “Small Business Loans Initiative,” this program will help businesses raise capital in the range of ₹ 500,000 ($ 6,720) to ₹ 50,000 ($ 67,200) at an annual interest rate of 17-20. %. However, for businesses run wholly or partially by women, the business will offer a 0.2% discount on the interest rate.
The best part? Companies that take advantage of this facility will not have to post any guarantees or pay any type of membership fee. Instead, Lender Partner Indifi, a CDC-backed Gurgaon-based company, will assess 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 director Ajit Mohan said small businesses in 200 Indian cities can apply for the loan.
Finally, for the moment, Facebook will not monetize this program.
“We believe it is in our best interests that there is massive growth in the small business ecosystem in India, because as a business we are playing this for the long haul. We will benefit disproportionately because a lot of this small business activity takes place on our applications as they grow, ”Mohan said.
For now, the aim of the program is to help provide easy capital to businesses, which remains one of the biggest problems for businesses in India.