Microfinance Company Registration
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Microfinance companies, as the name suggests, are financial institutions that provide finances to low-income groups, where the finance requirement is lesser as compared to other sectors of society.
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Introduction
What is a Micro Finance Company?
KEY TAKEAWAYS
- Microfinance is a banking service provided to low-income individuals or groups who otherwise would have no other access to financial services.
- Microfinance allows people to take on reasonable small business loans safely, in a manner that is consistent with ethical lending practices.
- The majority of microfinancing operations occur in developing nations, such as Bangladesh, Cambodia, India, Afghanistan, Democratic Republic of Congo, Indonesia, and Ecuador, among others.
Benefits
Benefits of Micro Finance Company Registration
Promote socio and economic growth
The Micro Finance Company promote socio and economic growth of the economically weaker sections of the society.
Build a financial system for the unemployed
The focus of Micro Finance Company is to build a financial system for the unemployed and poor people of the society.
No need for minimum capital requirements
There is no need for minimum capital requirements if the company is registered as a non-profit Company.
No approval from RBI
Section 8 Company requires no approval from RBI but will follow all the compliances of the Companies Act, 2013.
Process
Micro Finance Company Registration In Easy Steps
Microfinance Company Registration as an NBFC
Register a company
To be registered as an NBFC microfinance company, the first step is to form a private or a public company.
Raise capital
The subsequent step is to raise the required minimum net owned funds of Rs 5 crore. For the northeastern region the requirement is of Rs 2 crore.
Deposit the capital
On collection of capital, the next step is to deposit the capital in a bank as a fixed deposit and obtain a ‘No lien’ certificate for the same.
Document Checklist
Documents required to Registration
Digital Signature
Digital Signature Certificate (DSC) of Directors;
PAN Card
A copy of PAN of all Directors/Promoters;
Photograph
A latest passport size photographs of all Directors/Promoters.
Address Proof
A copy of address proof like Electricity Bill, Bank Statement, Telephone Bil
Certificate of Incorporation
A true certified copy of the certificate of Incorporation of Company
Copy of Identity
A copy of Identity Proof like Passport, Aadhaar Card, Voter ID.
