Online advertising: Facebook launches loan programme for SMBs: Small businesses at heart of tech giant’s India push
Representational image.  |  Photo Credit: PTI
- While Facebook may have insisted that it isn’t looking to make money on the loan programme directly, securing a loan will require borrowers to advertise on Facebook or any of its subsidiary apps for a minimum of 180 days
- The programme is viewed as a means to increase its foothold in India’s small and medium-sized business space
- With the rollout of Apple’s new IOS update, Facebook’s ad revenues are now under threat
Facebook has teamed up with online lending firms to launch a new initiative in India aimed at enabling small and medium-sized businesses to secure loans. The social media conglomerate’s Small Business Loans Initiative will offer SMBs loans ranging between Rs 5 lakh to Rs 50 lakh through a partnership with lending firm, Indifi at interest rates between 17 and 20 per cent.
India, as it turns out, is the first country that Facebook has launched such a programme in, signalling the lucrative opportunities that the tech giant sees in the Southasian market.
In a call with reporters on Friday, Ajit Mohan, Facebook’s India head said that small businesses in as many as 200 cities will be eligible to apply for these loans. Importantly, Mohan also asserted that the loan initiative was not a monetisation ploy.
“We believe it is in our self-interest for there to be a 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,” he said.
“We are not looking to make money from this program. We don’t have any revenue-sharing agreement. We are not putting any constraint on how this money is spent,” he added.
So what exactly is in it for Facebook then? Well, while Facebook may have insisted that it isn’t looking to make money on the loan programme directly, securing a loan will require borrowers to advertise on Facebook or any of its subsidiary apps for a minimum of 180 days.
The programme is viewed as a means to increase its foothold in India’s small and medium-sized business space. It also arrives on the heels of a $5.7 billion investment the company made last year into Reliance’s Jio Platforms.
Facebook’s meteoric rise has been unprecedented and much of that has had to do with how it has successfully managed to boost its ad revenue year on year. According to a Forbes report, the company’s ad revenue reached $84 billion in 2020. Compare this to earnings of $764 million just eleven years ago. Making itself an indispensable component of a small or medium-sized business’s digital marketing strategy has been key to the company’s ability to stave off competition.
The launch of the new loan scheme is another signal that Facebook has identified India as one of its key growth markets. As per some reports, Indian users on Facebook are estimated at some 410 million. India is also WhatsApp’s largest market with 530 million users. Meanwhile, Instagram now, reportedly, has some 210 million users, having benefitted from a blanket ban on the Chinese short video platform, TikTok last year.