Microfinance companies play a crucial role in financial inclusion by providing small loans and financial services to low-income individuals. If you’re looking for microfinance company registration, wondering how to register a microfinance company, or need insights into Section 8 microfinance company registration, this guide covers everything in detail.
🏢 Types of Microfinance Companies in India
| Type | Regulatory Authority | Capital Requirement | Purpose |
|---|---|---|---|
| NBFC-MFI (Non-Banking Financial Company – Microfinance Institution) | RBI (Reserve Bank of India) | ₹5 crore (₹2 crore for NE states) | Provides small-ticket loans to low-income individuals |
| Section 8 Microfinance Company | MCA (Ministry of Corporate Affairs) | No minimum capital requirement | Operates as a non-profit for financial inclusion |
✅Eligibility Criteria for Microfinance Company Registration
For NBFC-MFI:
✔ Minimum Net Owned Funds: ₹5 crore (₹2 crore for NE states)
✔ 85% of total assets should be allocated to microfinance lending
✔ Incorporation under Companies Act, 2013
✔ RBI approval is mandatory before operations commence
For Section 8 Microfinance Company:
✔ No prescribed minimum capital
✔ Must be registered as a Section 8 Company under the Companies Act, 2013
✔ Profits must be reinvested for social objectives
📂 Documents Required for Microfinance Company Registration
| Document | Purpose |
| PAN Card | Identity proof of directors and company |
| Aadhaar Card | Address proof of directors |
| MOA & AOA | Constitution documents of the company |
| Digital Signature Certificate (DSC) | Required for online registration |
| Director Identification Number (DIN) | Unique ID for company directors |
| Business Plan | Essential for RBI approval (for NBFC-MFI) |
| Net Worth Certificate | Proof of minimum capital for NBFC-MFI |
| Bank Statement | Financial viability proof |
| RBI Application | Required for NBFC-MFI registration |
📝 Microfinance Company Registration Process (Step-by-Step)
1️⃣ Incorporation of the Company
🔹 Choose a unique company name and acquire DSC & DIN for directors
🔹 Register via MCA portal (SPICe+ Form)
2️⃣ RBI Approval (Only for NBFC-MFI)
🔹 Prepare a business plan detailing operations, compliance, and financial strategy
🔹 Submit an application to RBI along with required documents
🔹 Await RBI verification and issuance of a Certificate of Registration (CoR)
3️⃣ Essential Licenses & Registrations
📌 PAN & TAN from Income Tax Department (Will be issued once the company is registered)
📌 Open a business bank account
📌 GST Registration (if turnover exceeds threshold)
📌 Comply with the Shops & Establishments Act (if applicable)
4️⃣ Funding & Operational Compliance
💰 Raise funds via equity investments, bank loans, or grants
📄 Maintain strict KYC compliance & lending policies
📊 File financial statements with RBI or MCA regularly
🏦 Microfinance Company Name Suggestions
| Category | Name Suggestions |
| Traditional | Bharat Microfinance, Gramin Finance, Swabhimaan Finance |
| Modern | FinGrow Microfinance, MicroWealth Solutions, Uplift Micro Loans |
| Trust-based | SureTrust Microfinance, Reliable Micro Credit, SafeHands Finance |
| Social Impact | Empower Microfinance, Janhit Finance, People’s Growth Micro Loans |
📜 Compliance Obligations
For NBFC-MFI:
✔ Annual returns filing with RBI
✔ Maintain capital adequacy per RBI norms
✔ Follow Fair Practices Code for loan disbursement
For Section 8 Microfinance Company:
✔ Annual financial statements submission to MCA
✔ Profits must be reinvested in social causes
✔ Follow Income Tax Act for tax exemptions
🎯 Conclusion
Starting a microfinance company in India requires careful planning and regulatory compliance. While NBFC-MFIs need RBI approval and high capital, Section 8 Microfinance Companies are easier to set up with a non-profit structure. Selecting the right type of micro finance registration ensures alignment with business goals and legal frameworks, enabling sustainable financial inclusion.
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