To provide assistance to small businesses and start-ups Facebook is launching an initiative to provide loans to struggling businesses. The loan is available for small enterprises in around 200 Indian cities. Starting a business is straightforward, but receiving a loan to start it is far more complicated since a businessman has to go through a lengthy process when applying for a loan.
In 2020, Facebook, in association with the OECD and the World Bank, did a survey that revealed that 2020 will be the most difficult year for small enterprises to make money. As a result, Facebook has decided to assist such small businesses. Although this is not the first time Facebook has taken such a step, the internet giant had previously announced a year ago that it will provide small businesses in India with up to $4.3 in loan support.
This time, however, Facebook increases the loan size around $6,720 to $67,200, with an interest rate of 17 percent to 20 percent per year and no collateral or joining fee required. However, if a pertinent business is run by a woman, the company will be entitled to a loan with a special 0.2 percent annual interest rate. It is thought that by providing loans to women at such a low-interest rate, Facebook is aiming to assist women-owned businesses to run efficiently and without difficulties.
Facebook continues to educate small businesses about the lending initiative, as well as assisting its partners in developing strong relationships and interactions with businesses. To comply with this, Facebook is implementing an on-call support system that will respond to loan applicants within one day of their application. In a recent interview with Tech Crunch, Facebook revealed that all partners will be capable of handling all loan payment risks as well as reviewing the loan eligibility requirements.
However, in order to qualify for a loan through this program, a business must advertise for at least 180 days on Facebook-owned platforms.