How can I start microfinance?

How can I start microfinance?

The role of Micro finance company in Indian Economy is very wide. As small retailers or shopkeepers are not having civil records so they can not borrow loan from tradational banks. In india 95% of lending by banks is for only 5% of total population. Despite government have been promoting SME & micro business in india though results remain unchanged in past 5 years.

Due to limited reach of banks in rural & remote area the micro finance company can play vital role by giving small amount of loan Rs 50,000 to 100,000 to poor & weaker section of society.

Micro finance can be either registered under section 8 of companies act as micro credit organisation like Bhartiya Micro Credit | Home

The registration of micro credit is much cheaper approximately Rs 28,500 & TAT is 30 days. You can appply from this link micro finance Company Registration under section 45–1A of RBI act.

Micro Finance Institution (MFI) is a non-deposit taking NBFC (other Than a company licensed under section 8 of the Companies Act. 2013)

NBFC performs banking at small level as a bank does. MFI Exist at very small level than NBFC.

MFI stands for Micro Finance Institutions are providing similar lending services as NBFC to the poor and weak sections of the society who do not have access to regular banking facilities. MFI Provides small loan amount Rs. 10,000 to 20,000 to start a business.

India is world No.2 fastest growing economy with a large population. Government banks and private sector banks can not open their branch in every village. Though, Indian banks have increased their presence but still have limited reach in remote areas. Micro fiancé institutions (MFI) mainly working in villages / remote area to empower farmers and small business in villages.

Procedure For NBFC-MFI Registration:

1Company Registration

The first step is to form a new Public Limited Company under the Companies Act

2Minimum Net Owned Fund

NOF should be Rs. 500 Lac After the incorporation of a new Company in the form of Equity share capital. The Capital to be raised after incorporation of a company here should be Equity Share Capital and not Preference Share Capital.

3The Opening Of A Bank Account

The amount which is received post incorporation of the company shall be deposited in a bank account as Fixed Deposit and its must be free from all aliens.

4Application To RBI

Application to RBI for Business Operations

5 RBI will conduct due diligence and will issue certificate of commencement of business.

 


Visit HireCA.com Now