Microfinance Company Registration | Types | Benefits | Procedure - Corpbiz

Описание: The #MicrofinanceCompany is the financial institution that gives small-scale financial services in the form of loans, credit, or savings to low-income group individuals. These companies provide credit facilities to SME (small and medium enterprise) and other forms of organisations which find it hard and difficult to secure loan facilities from large financial institutions and banks.

Types of Microfinance Companies- Microfinance Company Registration

MFI can be registered either in the form of Section 8 company or in the form of NBFC-MFI.
Section 8 company is regulated as per the provisions of companies Act and NBFC-MFI is regulated by the RBI.

Section 8 company

1. Amount of loan provided by a microcredit institution would be up to Rs. 50000/- for rural areas and Rs. 125000 for urban areas
2. Microfinance companies are prohibited from accepting any form of deposits from the public.
3. no minimum capital requirements
4. No RBI approval
5. The interest rate charged by a #MFI must be reasonable.

6. Non-profit organization

NBFC-MFI

1. The company is advised to comply with RBI norms
2. Rs.5 crore net owned fund
3. Profit organization

4. Has to comply with the RBI norms

Benefits of #MicrofinanceCompanyRegistration as Section 8 Company

1. helps in promoting self-sufficiency and business start-ups
2. No minimum capital of 5 Cr
3. No RBI approval in case the registration is done under section 8 of the companies act
4. The easiest way to start a finance business
5. It can charge up to a 26% rate of interest

6. Promoting socio-economic growth

MFI registration is done through two ways:

1. Section 8 company with MCA

2. NBFC – MFI with the RBI

Microfinance Company Registration Procedure through Section 8 Company

1. First step is name search and availability check
2. DSC digital signature certificate for promoters
3. Fill the spice+ form
4. Obtain the Certificate of incorporation
5. Open a bank account
6. The company must draft the MOA and AOA and file it along with necessary documents.
7. File all relevant documents: The primary basic documents required for registering a company under both the models are:
• PAN Card copy of all directors/promoters
• Documents for identity proof
• Documents for address proof
• Photograph of all directors/promoters
• Proof of ownership of registered office or rental agreement for the same
• NOC from the owner
• Any other documents as required
• Once the company is incorporated you can start your business as a microfinance

Microfinance Company Registration as an NBFC

• The company should registered under companies Act
• Name search and Availability check
• DSC digital signature certificate for promoters
• The applicant has to click on SPICE+ form under the respective MCA services
• Fill the form
• Obtain the Certificate of incorporation
• Open a bank account
• Collects documents to file with RBI
1. COI, MOA, AOA
2. Copy of FD receipt
3. Banker’s Report
4. Board resolution under MFI activities
5. Auditor’s report
6. Business plan
7. KYC of directors and shareholders
8. Director’s profile
9. Registered office proof
10. KYC of promoters
11. NOC from company
• In the next step, the applicant has to make an online registration with the RBI for Microfinance company registration. With this the applicant would receive a ‘Company Application Reference Number’.
• After this process, the applicant has to submit hard copies with the respective regional office of the RBI. The RBI would carry out scrutiny and respective due diligence to confirm with the requirements.



For more information visit: https://corpbiz.io/microfinance-compa...

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