Microfinance Company Registration
Microfinance Institutions provide financial services such as loans, savings, and insurance to needy people of the society and small business entrepreneur who will not be able to qualify for a standard bank loan.
Features of Microfinance Institutions
Here are the following key features of Microfinance Institutions:
- Microfinance Institutions must be incorporated as per the Companies Act 2013 or 1956.
- Before starting operations they must have a minimum net worth as prescribed by the authority.
- They must have obtained the necessary license or permit.
- They are involved in the low amount of financing to the needy people of society.
Benefits of Microfinance Company Registration
For Microfinance Institutions in India, Reserve Bank of India has created a policy framework in order to provide necessary legitimacy to the sector.
Here are the following benefits of Microfinance Institutions:
- It helps in encouraging self-sufficiency and entrepreneurship
- Smooth access to funding
- Better overall loan repayment rate in comparison to traditional banks.
- It helps in strengthening the financial condition by meeting the credit needs of needy people by giving a different type of loans such as emergency loans, business loan, working capital loan, housing loan etc.
Documents Required for MFI Registration in India
From All Directors and Shareholders
- Duly Certified copy of Certificate of Incorporation of a company.
- Certified copy of Memorandum and Articles of Association (MOA & AOA) of the Company
- Board Resolution in relation to the proposed Microfinance company registration
- Banker’s Report
- Auditors report regarding receipt of the minimum net owned fund (NOF) of the applicant company
- A certificate of Chartered Accountant regarding details of group/associate/subsidiary/holding companies along with the details of investments in other NBFCs as shown in the Performa Balance Sheet
- A certified copy of the highest educational and professional qualification of all the proposed directors of an applicant company.