Facebook’s India head believes that the social networking platform has immense “superpower” capabilities that can benefit micro, small, and medium enterprises (MSMEs) around the world. Speaking at a virtual news conference, Ajit Mohan, VP and MD Facebook India, said, “We don’t want to be a super-app for MSMEs. I would argue that we are already an app with a lot of superpower for MSMEs around the world.” Globally, Facebook has over 200 million business users of which only 10 million are advertisers.
On Friday, Facebook India announced a new program—Small Business Loans Initiative— which would assist MSMEs in India get quick access to credit through independent lending partners. “We do genuinely believe that this is an exciting opportunity to connect the dots between the economic activity that we see on our apps and the thriving lending industry that is happening in India,” said Mohan. It is estimated that the Indian MSME sector contributes about 29% towards the GDP through national and international trade.
Mohan stated that there would be no constraints on MSMEs availing of these loans. “They don’t have to advertise on Facebook using this money.” Further, he clarified that there is no monetary benefit for the company through this financial outreach programme. “We don’t get a cut. It’s an arm’s length relationship with the lender,” added Mohan.
According to Amitabh Kant, chief executive officer, Niti Aayog MSMEs will play a significant role in reviving India’s economic growth and making the country more self-reliant. Digital transformation, he said, will act as a catalyst for India’s development story going forward, and access to finances will be crucial to this transformation. “In this context, Facebook's Small Business Loans initiative is a big step in the right direction,” added Kant. India is the first country where this program is being rolled out.
Industry body FICCI has been advocating for stronger private sector participation for the growth of India’s 6.3 crore strong MSME sector. “We look forward to collaborating with Facebook over the coming months to develop programs and solutions that can provide an impetus to the sector,” said Uday Shankar, president, FICCI.
“We believe that it’s in our self-interest for there to be massive growth in the small business ecosystem in India. As a company we are playing this for the long-term and we will disproportionately benefit because a lot of these small business activities happen on our apps as they (MSMEs) grow,” said Mohan.