How to open Micro Finance Company in India?
How to start Micro-Finance Company in India. Also let me know the procedure to Register the Micro Finance Company (MFI) in India.
Before you set microfinance institute, it really is required to determine the fundamental premise i.e. you want to start MFI as a profitable organization or you want MFI as an institution that is non-profit.
Firstly, Non-profit Microfinance Institution is registered as trusts or communities or Companies under respective acts i.e. Indian Trust Acts, 1882 / Societies Registration Act, 1860 / Companies Act, 2013. Microfinance may be registered under section 8 of businesses Act, 2013.
Basic Requirement to Start a Microfinance Business in India:
- RBI approval is not required at all.
- The registration cost is under Rs.50,000/-
- No ceiling on minimum capital required (For example: 2 crores.)
- Lesser compliances as compared to the NBFC
- Can give loan for dwelling residence up to Rs.1.25 lakh.
- Can give unsecured loan to small business of Rs.50,000
This will be probably the method that is cheapest to register a Micro Finance Company in Asia. Then you could begin with section 8 business if you're interested to begin a micro finance business.
Next, Micro Finance business is a kind of Non-Banking Financial Company (NBFC) which can be in a continuing business of microcredit up to a type that is exclusive of. This will be a non-deposit using NBFC.
The process to register finance that is micro as NBFC is little high and complex priced. As per RBI, NBFC shall be registered only because of the web that is minimal funds of Rs.2 Cr. Here is the requirement that is very is fundamental.
Basic Requirement to Register Microfinance Company in India:
- Register a Company.
- Fill the online application form.
- Get nearly all of the copies that are certified complete one other RBI formalities.
- Raise Authorised and paid up capital to Rs.2 crores.
- Submit the copy that is hard of application to the Regional workplace of the RBI
- Deposit Rs.2 crores. In fixed deposits and acquire a certification.
- Wait and coordinate with the RBI (Reserve Bank of India) for further directions.
The cost that is total NBFC registration is around Rs. 8 lakh to 9 Lakh, in which Rs. 4 to 5 lakh may be the expert fees and rest could be the federal government and RBI charges.