Microfinance Company Registration
Affordable Pricing & Easy Process
A microfinance company, also called a microlending institution or MFI, provides small loans to people who have trouble getting them from other banks. MFCs are regulated by the Reserve Bank of India (RBI).
Registration process of Microfinance
A microfinance company, or MFC, is a financial institution that provides loans and other assistance to poor rural people and low-income urban residents. To start a MFC in India, one must acquire a Microfinance Company Registration from the Reserve Bank of India. It should be noted that the operations and affairs of an MFC are governed and regulated by provisions of the Reserve Bank of India Act 1934 and the directions issued thereunder.
Microfinance companies are financial institutions that give small loans, credit, and other money-related services to people with little income. Banks do not generally give loans to small businesses because they have a long process for approving loans. As a result, microfinance companies are known as “microcredit” and “microbusiness” organisations. There are two types of microfinance companies: Non-Banking Financial Companies (NBFC) that have to be approved by the Reserve Bank of India (RBI), and Section 8 companies incorporated under Companies Act 2013 as non-profit ventures.
Benefits of Section-8 Micro Finance Company incorporation
To make credit available to entrepreneurs and small businesses, the Government of India and the Reserve Bank have developed a policy framework for microfinance institutions. Their policies aim to provide legitimacy and support to the sector. The key advantages of registering a microfinance company in India include:
- Easy access to public fund in no time.
- Due to its business object to finance it helps in generation of employment.
- Less interest rate as compares to NHFC, Bank.
- Minimum criteria for capital requirement for setting up Micro Finance Company has been done away by companies act 2013.
- There is No Collateral/Security Lending.
- No approval required from RBI for operation of business.
- A MFC company can provide loan for dwelling residence up to Rs.1.25 lakh.
- MFC is eligible to give unsecured loan to small business of Rs.50,000.
Documents required for MFC registration.
- Self-attested signed and dated PAN card and ID proof issued by the government of Directors and owners.
- Valid Phone No and email Id of all directors and owners.
- Colour passport size photo of all directors and owners.
- Business address proof such as Gas Bill, Blectricity Bill, Telephone Bill, Mobile Bill, Internet Bill.
- If Business address is on lease or rent then lease or rent agreement.
- In case business address is owned then sale deed with NOC.
Step to be taken for getting license of Microfinance Company Registration (MFC) in India.
Step 1 Filing application for digital signature certificate in the name of director and its owner and obtain the same.
Step 2 Preparation of document and information required such as INC-9, DIR-2, Declaration and NOC.
Step 3 Drafting and vetting of Memorandum and Article of Association for Microfinance Company Registration (MFC)
Step 4 Online preparation of e-form for setting of Section 8 Microfinance Company Registration (MFC) in India.
Step 5 Sign and submission of e-form with ROC
Step 6 Issue of Certification of Incorporation by Ministry of Corporate Affairs.
Step 7 online filing application for issue of PAN and TAN.
Step 8 filing application with RBI for status of Section 8 Microfinance Company Registration (MFC).