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IDEA FOR START-UPsMicrofinance Company Registration

Find out how to register a Microfinance Company, the most popular way of starting a business in India. Get to know the Microfinance Company registration procedure.
What is an NBFC?

A Non-Banking Financial Company (NBFC) can be defines as a company which is registered under the Companies Act, 1956 of India, engaged in the business of loans and advances, acquisition of shares, stock, bonds hire-purchase, insurance business or chit business but does not include any institution whose principal business includes agriculture, industrial activity or the sale, purchase or construction of immovable property.

What is MFI?

Micro Finance Institutions(MFI’s) can be defines as a microfinance institution is an organization that offers financial services to low income populations. Almost all give loans to their members, and many offer insurance, deposit and other services. A great scale of organizations are regarded as microfinance institutes. They are those that offer credits and other financial services to the representatives of poor strata of population.

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Difference betweenNBFC’s and banks

An often heard question from the laymen is what is the difference between a bank and non-banking finance company? Like for an example- There is a difference between ICICI bank and Mahindra Finance. Yes! Banks and other non-banking financial institutions differ in some functional area.

Banks and NBFCs are basically financial intermediaries. Banks are regulated under the Banking Regulation Act though most of the laws of Companies Act are also applicable to banks. NBFCs are registered under the Companies Act.  Both are regulated by the RBI. Main differences between banks and NBFCs are:

Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in case of banks.

NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself

Bank is a financial institution whose liabilities (i.e., deposits) are widely accepted as a means of payment in the settlement of debt. On the very other hand, on-bank financial intermediaries are those institutions whose liabilities are not accepted as means of payment for the settlement of debt.

Banks are termed as creators of credit through money multiplier activity whereas NBFCs are not.

OUR PROCESS

From your Procedure

STEP 1Company Registration

The first step is to form a new Public Limited Company under the Companies Act.

STEP 2Minimum Net Owned Fund

The Capital to be raised after incorporation of a company here should be Equity Share Capital and not Preference Share Capital.

STEP 3The Opening of a Bank Accountant

The amount which is received post incorporation of the company shall be deposited in a bank account as Fixed Deposit and its must be free from all aliens.

STEP 4Application to RBI

Application to RBI for Business Operations.

STEP 5RBI

RBI will conduct due diligence and will issue
certificate of commencement of business.
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BEFORE SCALABLE

Documents
Required

Minimum Required Documents For Company Registration
Identity Proof
Aadhar Card, Driving License, Election Id Card, Passport
Address Proof of Business
Electricity Bill, Rent Agreement + NOC
PAN Card
Copy of PAN Card
Photo
Passport size Photograph

Compare your options

Features NBFC-MFI Nidhi company NBFC-ND
Initial capital Min. Rs. 5 Crore Min. Rs. 10 Lakh Min. Rs. 2 Crore
Members 7/2 7 at the time of registration and after registration min 200. 7/2
Recommended for Poor and lower income group. Member based Mutual benefit society Commercial Banking Business
Governing Laws RBI Act. 1934 Companies Act. 2013 RBI Act. 1934
Directors 3/2 3 3/2
Operations PAN India PAN India PAN India
Credibility 10/10 8/10 10/10
Loan Limit Maximum Rs. 50,000 0 0
Registration time Maximum 180 Working days Maximum 20 Working days Maximum 90 Working days
Popularity High lower High
Registering Authority ROC & RBI Registrar of Companies ROC & RBI
ADVISOR CONSULTATION

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ASSURED CUSTOMER SATISFACTION
CLIENT DATA CONFIDENTIALITY
NO HIDDEN FEE
SECURE ONLINE PAYMENT