Microfinance Company Registration

Form your Microfinance Company online
Starting At Rs.1,95,000-/ (inclusive all)
Microfinance registration by section 8 Company,
No RBI Approval,
AT MINIMUM COST…!!!
(Takes 25 to 30)

Grow Up Your Business With Us

The Microfinance Company is generally the financial institutions that provide small-scale financial services in the form of loan, credit or savings. These companies are initiate to simple the credit system for small businesses as they don’t get a loan from banks due to their multiplex procedure. Therefore it is generally named as a Micro-credit organization. They offer small loans to various small businesses or households that do not have access to formal banking channels or eligibility for loans. They issue small loans that are less than Rs.50,000 for rural areas and for urban it is Rs.1,25,000. The easy way to register a Micro Finance Company in India is to register the Section-8 Company with MCA ( Ministry of Corporate Affairs). Without charging any marginal money or guarantee security. It can give loans at low cost rates managed by the RBI and central government. They are a huge support to all rural and agricultural development including income and employment creation. There are basically 2 types of microfinance companies that are allowed in India, one is which has to be registered with the RBI and another is the non-profit type, which is registered as section 8 company and does not require RBI approval.

Procedure For Microfinance Company

Name Approval Application

Details give by you will be check and then we will apply for name approval.

Dsc (Digital Signature)

After submitting your documents we will provide you DSC and DPIN.

Apply For DIN

Director Identification Number is a Unique Number that is provide to Existing Directors of Incorporated Companies.

Certificate Of Incorporation

File for Incorporation Certificate will be setup with CIN, PAN & TAN.

Pan And Tan Application

Apply for PAN & TAN as they will be need for opening a bank account.

How To Register The Micro-Finance Companies In India?

The microfinance can be registered in India by Section 8 company. Section 8 does not require any minimum capital. Here is the process:

Prepare DSC & file for Name Approval

The first step is to register DSC and DIN. This takes some time for 1-2 days. It is used for signing the online forms, filed with ROC for Incorporation Of Company. DSC cannot be used in Physical Documents. The Company Registration in the procedure is completely online and so it need DSC to incorporate a company. Thereafter, you need to register for name approval. Name Applications under RUN will be processed by the Central Registration Centre (CRC). The Name Approval is subject to proper check by the CRC and thereafter Approval Or Rejection must be communicated by E-Mail to the Applicant. The name should be unique and must end with words like foundation, Sanstha, etc. Moreover, a maximum of 6 names can be filed at one time.

Apply for DIN

Director Identification Number is a Unique Number that is provide to Existing Directors of Incorporated Companies. This identification number is given by the Central Government to any Individual, planning to be appointed as Director or to any Existing Director of a Company. Once Got DIN Number, the Director can apply the same for life irrespective of the company he/she works in. If you change the company it doesn’t change the DIN Number.

Certification of Incorporation:

The third step is to file the incorporation along with all require papers. The form is joined with all the require attachments like MOA, AOA, declarations, etc. Incorporation certificate must be forming with CIN, PAN & TAN. The company has to pay the Stamp Duty Irrespective of the Capital as Stamp Duty is a state subject. Once the company is incorporated, you can start the microfinance business in India. But, please remember that you cannot take any deposit under section 8. After that instantly apply for PAN And TAN as they will be need to open A Bank Account.

Documents Required

PAN card: In the case of Indian citizens, the PAN card of shareholders and directors.
Passport size photograph: Not more than 10 months old photograph of directors and shareholders.
ID proof: Copy of Aadhaar card/voter identity card/passport/driving license of directors and shareholders
Rent agreement: If you have rented property, then a copy of rent agreement
Address proof: Electricity bill, water bill, bank statement, gas or telephone bill of shareholders and directors
Registered office proof: Electricity bill, water bill, bank statement, gas or telephone bill of the registered office address
Copy of Notarised Rental Agreement
NOC from the owner: No objection certificate is needed from the owner of the registered office

Interest Rates On Loans

There are usually 3 types of charges that can be imposed by the Micro Finance Company (MFI)
Interest Charge:The average interest rate must not exceed 26%.
Processing charge:
The processing charge should not more than 1% of the gross loan amount.
Insurance premium:
Only the actual cost of insurance for group, life, health, etc to be charged and no extra is permitted as per RBI policy.
Calculation of Interest Rate for Micro Finance
The rates of interest charged by Micro Finance Companies must be less of the following:
Cost of funds plus 12% margin or
Average base rate multiplied by 2.75.

Why To Register For Microfinance Company?

Promoting socio-economic growth: At the community level, the microfinance company will encourage socio+ecomic devlopment . Also, authorize self-help groups along with ease sustainable development by them. A variety of other financial services will be need by the poor and not just loans; hence, it is a strong tool to remove the poverty factor.
Offers reasonable services for small businesses: It centre on devloped a financial system for the poor and unemployed and propose to make permanent local financial institutions that try to engage domestic deposits, recycle them into loans, and provide other financial services.

No RBI Approval: No long process and simple to register as there is no RBI approval need when you register as a non-profit company. Even, there is no require for minimum capital of Rs. 2 Crores.
Minimum Compliances: Company is suppose to follow with RBI standards even if it is not need to register with the reserve bank. But no acceptance from RBI is required. Section 8 company will follow with Companies Act the same way as other companies do. That’s all!

Provide a way to funding: It provides a better inclusive loan repayment rate than traditional banking products. Addition, which will help in meeting credit require for such a population range from emergency loans, consumer loans, business loans, working capital loans, housing, etc.

What Is Included In Our Package?

DIN for 2 Partners
Digital Signature For 2 Directors
Company Pan Card
Name search & approval
MOA/AOA
Registration Fees

Advantages Of Micro Finance Company

No minimum capital of 5 Cr
No RBI approval
Easiest way to start finance business
Can charge up to 26% rate of interest.

Micro-Credit Loans Under Micro Finance Company

Loans under microfinance companies are not confused . Most unsecured loans are given and against monthly repayments or weekly repayments. Interest is charged often in the range of 20 -26%. Except the following points are also mandatory which are as follows:
NBFC can charged a differential rate of interest to its customers but alter must not be more than 4%.
The interest on the loan to be levy on decreasing balance method.
Microfinance companies to show in all the offices or literature, the effective rate of interest.
Companies must issue a loan card to all members saying the interest rate, all different terms & conditions.
Loans are also provided in self-help groups (SHG) and other link programs.
If no repayment is received within 90 days, then the same must be manage as a non-performing asset, though, provisioning usual do not apply to section 8 company.

Mandatory Compliances For Micro Finance Company

RBI Compliance:
The company is expected to comply with RBI norms even if it is not required to register with the reserve bank.
Company Act:
Section 8 company also required to comply with the Companies Act, in the same way, other companies.
Additional:
There are other laws as well which are to be taken care of like PMLA etc if talk about the mandatory compliances.

Mandatory Requirements For Micro Finance Company

There are important 2 ways to register the Micro Finance Institution (MFI). One way is to form a company and then register to RBI for approval. The least requisite for Microfinance company is Rs.5 crore net owned fund and active profiles of promoters. The second way is to register a section 8 company. Insidetax provide the second way of registration. Register for central government licenses details of which are as follows:
The highest Rs.50,000 can be given for business object and Rs.125,000 for household dwelling.
No least net owned fund requisite You can select on your own
No RBI approval is required since RBI has exempted this company from registration and some differ situations

Acceptance Of Deposits Under Micro Finance Company

Deposits are not autorized to be obtain under section 8 company. Moreover, the company has to invest its funds and start your microfinance company. Further, the company may also raise funding by way of donations.
Even if you are plan to register an NBFC company and ready to invest Rs.5 Crore into the business, then also deposits are not autorized to be taken. As per the RBI procedure, first, you need to register an NBFC non-deposit-taking company and accordingly apply for deposit-taking status from the Reserve Bank of India (RBI).
Thus,, it instruct if you thoughtful to register your own NBFC, first start with microfinance company, test your skills and then move forward.