Micro Finance Company Registration

Micro Finance Company is a non-deposit taking Non-Banking Financial Companies (NBFC) that offers micro or small finance to low income groups and families with less income living in rural and urban areas. A Micro Finance Company or Institutions extends small funding support at competitive interest rate with flexible repayment options. The Micro Finance Institutions (MFIs) mainly cater to the individuals/organizations those are unable to borrow money from mainstream banks, NBFC or other financial institutions.

Micro Finance Company Registration Process

Below specified are the steps to register as a Micro Finance Company with Registrar of Company (ROC):

Step 1: Register as a Private or Public Limited Company

The first step is to register as a private or public limited company and then get registered as NBFC Micro Finance Company

Step 2: Being eligible for registering as Private or Public Limited Company

The capital investment of minimum Rs. 1 lakh with 2 members for private company and 7 members with amount of Rs. 5 lakh for public limited company registration

Step 3: Raise capital

Arrange and raise the capital of net owned funds of at least Rs. 5 crore to further deposit in a bank as a Fixed Deposit to get a ”No Lien” certificate from the bank

Step 4: Apply for NBFC License

NBFC License can be applying and obtained by filling and depositing an online application form to the Registrar of Companies with submission of hard copy with RBI

Step 5: Get NBFC Registration Certificate to start a Micro Finance Company

After the form submission and approval from ROC get the NBFC certificate in 10-15 working days.

Other Company Registration Process in India
Private Limited Company Registration	Public Limited Company Registration	Partnership Firm Registration
LLP Registration	Nidhi Company Registration	Proprietorship Firm Registration
Copyright Registration	ISO Certification	NBFC Registration

Features of Micro Finance Company

• Loan offered to borrowers from Low Income Groups
• Collateral free loans with no pre-payment charges
• Shorter repayment tenure
• Minimum Net owned funds should be Rs. 5 crore if registering as an NBFC (Rs. 2 crore for North East Regions of India)
• Not mandatory to be a member of any of the Self-Regulatory Organization (SRO) such as RBI, SEBI, NABARD, SIDBI or IRDA
• 4% or less should be the difference between the interest rate charged
• MFIs needs to be a member of Credit Information Companies (CIC)
• MFIs shall demand processing charges from the customers not more than 1% of the loan amount

Documents Required

• Duly filled application form with passport-sized photographs of all directors
• KYC of directors and shareholders (Passport, Voter’s ID card, Driving License, Aadhar card, Utility Bills)
• Business Incorporation Certificate
• Income proof of directors and shareholders along with their PAN cards
• Business address proof or rental agreement
• NOC from the owner
• Applicable stamp duty (As per state)
• Any other documents required by the respective authority

Following the mentioned steps and submitting these documents, entrepreneur can run Micro Finance Company after the incorporation of a company and after getting approval from the RBI.