Meta’s initiative enables working capital access that can help SMEs scale faster
With more and more people moving online, there has been a massive shift in consumer behavior and how people and businesses interact with each other. Corporate messaging, augmented reality and innovative short-form video formats such as Reels are just a few examples of how businesses are finding new and innovative ways to reach their customers digitally, and consequently scale quickly.
Over the past few years, direct to consumer businesses have boomed. More and more of them come from small towns and bring their powerful ideas to the world behind the digital.
But some challenges also remain. One such challenge for small businesses is access to timely working capital which prevents many of them from flourishing to their true potential.
We had a virtual discussion about the many initiatives that Meta has launched in the last two years to enable timely access to working capital for its small business advertisers in India. Speakers included Archana Vohradirector of small and medium enterprises at Meta in India, Neha Tandon Sharmafounder and CEO of Isadora Life and Anirudh Kollaraco-founder of Linen Trail. Both founders talked about their journeys and the positive effects they have seen as a result of timely access to working capital and digital tools.
Check out the highlights from the discussion here:
Key trends
Archana kicked off the discussion by highlighting how digital continues to be a driver of exponential business growth for small and medium-sized enterprises (SMEs) post-pandemic. According to Meta’s State of Small Business Report, nearly 55 percent of SMEs using Facebook in India generate at least a quarter of their sales through digital channels today.
Archana uncovered the rapid growth of D2C businesses in India.
She said that according to an IPSOS study conducted by Meta in 2022, 72% of surveyed SMEs in India reported that Meta apps have helped their business increase access to new customers. The same study said that more than half of surveyed SMEs in India reported that Meta apps have helped increase sales outside their country.
“We are also seeing more and more small businesses emerging from non-metro geographies that are now expanding internationally on the back of social media and digital. Similarly, over the past couple of years we have also seen more women-led businesses using our apps,” says Archana.
According to Meta, among the top 100 most followed Facebook business pages with up to 2 million followers in India, more than 50% of them are from non-metro cities.
When it comes to female entrepreneurs, more than 60% of Instagram businesses that self-identify as women-owned were created since the start of the pandemic.
Meta’s commitment to making working capital more accessible
While digital has opened doors to new opportunities that enable businesses to scale faster, access to working capital remains a challenge for many of them. This is a key reason why Meta is committed to making it easier for its small business advertisers to get timely access to working capital.
Meta started this journey in 2020 when, as part of its $100 million global grant, it announced grants to over 3,000 small businesses in India during an exceptionally difficult year.
“But we understood that the need for working capital went beyond the pandemic and that prompted us to launch Small Business Loans Initiative in 2021 and then No-Cost EMI in 2022 for all our small business advertisers. Both these programs were launched in India first,” said Archana.
The Initiative for small business loans is a program spread over 19,000+ pin codes, which are almost the length and breadth of the country. As part of the program, the small business advertisers can get quick access to collateral-free business loans at pre-defined interest rates from as little as INR 30,000 to as much as INR 1 Crore. Entirely or partially women-owned businesses can receive an additional discount of 0.02% on applied interest.
To meet the growing working capital requirement of small businesses, this year Meta also announced a new financial support feature – No Cost EMI which allows the advertisers to pay for their ad campaigns in easy installments spread over three months at no extra cost of interest to them. The interest payable to the bank is absorbed by Meta.
In addition to this, Meta’s monthly billing program allows advertisers to make one lump sum payment for ad spend across all their ad accounts at a monthly frequency. This program allows our small business advertisers to continue their campaigns without disruption and then unlock growth opportunities as they have 30 days to pay via bank transfer after an invoice is generated.
Meta helps businesses go D2C
Both founders on the panel, Anirudh Kollara and Neha Tandon Sharma, spoke about their journeys as entrepreneurs and hope that their stories can inspire other business owners, especially those from non-metro geographies.
Anirudh Kollara shared that Linen Trail – a linkless company from Thrissur – had to switch from offline to direct-to-consumer after the pandemic. Using Meta apps, he helped scale the business from Thrissur to 30 states across India and over 20 countries worldwide. He emphasized how the 30-day credit period under the Monthly Invoicing program by Meta has helped his business to scale and experiment better with the ad formats and content, which proved to be very critical for his business at the time.
Meta’s digital tools also enabled Neha’s Raipur-based Isadora Life to reach the right segment of the audience, women who wear sarees on a daily basis across India. Neha shared that the company would not have been able to grow and scale to the level it has in just three years if it had been confined to Raipur.
“As the business saw an increase in demand, access to working capital became a key need for us to grow,” said Neha.
Meta’s Small Business Loans Initiative helped Isadora Life grow 25% in just seven months.
What will be next?
Their high growth over the past 2-3 years has enabled both businesses to make ambitious plans for the future. With Isadora Life, Neha intends to offer more inclusive and Indo-Western products in the future. A major focus for Anirudh is hyperlocalization and creating a product line for women, which he hopes his mother will lead.
Both Neha and Anirudh advised SMEs to keep customers at the center and consistently work towards the goals that matter to their businesses.
Archana concluded the session by advising SMEs to focus on learning. She also recommended Meta’s advertising bootcamp program, which reaches 20+ million businesses in multiple languages. She also emphasized investing in corporate messaging and regularly measuring success to maximize return on ad spend.
