Microfinance Company Registration
Microfinance companies refer to financial institutions that assist low-income groups with finances. CAAQ provides end-to-end consulting for getting loans or funds. These financial requirements are mostly lesser if you compare with other corporate sectors. We guide you on how to access non-traditional financial institutions, for instance, banks, for fulfilling your financial requirements.
We have a team of certified domain experts, including CAs, CS, business experts, and more that has a hands-on experience in suggesting the best finance solutions. In addition to consulting, we come up with a series of microfinance company registration solutions online. These can be related to discovering authentic financial assistance, and much-needed support to startups. With complete monetary assurance (even for minimal hand loans), we promote women's entrepreneurship, introduce discipline in lending to low-income groups, and prevent over-borrowing without leading to high future debts.
Process for Microfinance Company Registration
However, the Reserve Bank of India monitors and conducts financial support. It observes if all financial activities are performed up to specified constraints.
There are ideally two ways to register a microfinance company in India.
A. Non-banking Finance Companies (NBFC) that are duly registered with RBI
It’s a profit-making entity that sticks to all compliance meant for NFBC. Besides, these steps are must follow:
• Private or Public Company
Any company can be registered as an NBFC microfinance company by forming a private or public company. For a private company, you require at least 2 members and a capital of INR 1 Lakh. In the case of a public company, you should have at least 7 members.
• Capital Requirement
For registration, you require a minimum net-owned worth of INR 5 crores. This requirement differs for the northeastern region-based companies, which should have at least INR 2 crores.
• Deposit the Capital
The next step is to have a deposit of the capital in a bank as a fixed deposit. You should obtain a “No Lien” certificate for it.
• Have a Licence
Finally, an application is to be filled out and submitted along with all valid documents. This application should be a hard copy and must be submitted to the regional office of the Reserve Bank of India. This procedure requires certain documents also in support, which are listed below.
B. Section 8 Companies
It’s a non-profit organisation, whose registration requires these steps to pass through:
• Digital Signature Certificate and DIN
• Name Approval
This step is dedicated to the name of the company. For this, you need to fill the Form INC-1. This name should sound a Section 8 Company, whose suffix like Sanstha, Foundation, or Micro Credit defines on its own.
• MOA and AOA
Upon name approval, the registration requires the Memorandum of Association (MOA) and Articles of Association (AOA). You need to show up some necessary documents to obtain these certificates.
This is the last but most crucial step, which ensures documentation of all relevant papers like the incorporation certificate & Form INC-12 for a licence. What documents it precisely requires, the below-mentioned list can help you find them.
Explore Advantages of Registering This Company
Here are the advantages of microfinance company registration online in India:
• Funding Support
You get immediate financial support to carry out business processes or requirements.
• Access to Credit
Lending load or capital becomes way easier, as RBI supports it.
• Easy Loan Repayment
You get the loan on a bearable interest rate to repay the borrowed amount.
• Recognition in the Market
It’s indeed challenging to borrow money in the market unless you’re a registered entity. This registration provides micro businesses financial support, which helps in gaining recognition in the market.
• Receive Education
With this registration, you have to organise your business in a streamlined manner. It educates you on how to carry out business like a typical corporate entity, which is learning itself.
• Up the Future Investments
As you get financial support, scaling up your business becomes way easier. It defines the possibility of more investment in the future.
• Creation of Real Jobs
Formally as a corporate entity, you grow over time because arranging money for scalability remains no more a challenge. More growth means more opportunities for job seekers in the market.
• Economic Gains
The smooth arrangement of funds ensures glitch-free business growth, which eventually leads to a significant increment in revenues.
Find the List of All Supporting Documents
Section 8 Company Registration