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MICROFINANCE COMPANY REGISTRATION
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Keynotes on Microfinance Company Registration
Microfinance Company Registration Services
By NYAY SARTHI INDIA FILINGS
What is a Microfinance Company?
A specialized financial institution that provides:
✓ Small-ticket loans (typically under ₹50,000)
✓ Financial access to unbanked/underbanked segments
✓ Support for micro-entrepreneurs and low-income households
Our Registration Services Include:
• End-to-end licensing assistance
• RBI compliance guidance
• Documentation support
Why Choose NYAY SARTHI INDIA FILINGS?
✔ Expert Team: Specialized in microfinance regulations
✔ Transparent Process: Clear step-by-step guidance
✔ Ongoing Support: Post-registration advisory services
Empower communities through ethical microfinance – Let us handle your company registration.
Step-by-Step MFI Registration Process
By NYAY SARTHI INDIA FILINGS
1. Company Incorporation**
✓ Register as Private/Public Limited Company under Companies Act 2013
✓ Minimum initial capital: ₹1,00,000
2. Capital Enhancement
• Increase authorized capital to ₹2-5 crore
• Strictly through equity shares (preference shares prohibited)
3. Bank Formalities
– Deposit capital as fixed deposit
– Obtain bank’s “No Lien” certificate
4. RBI Application
Submit to Reserve Bank of India:
✓ MOA extract (main object clause)
✓ Incorporation certificate
✓ Bank FD receipt & no-lien certificate
✓ Banker’s report
5. Online Submission
• File application via RBI portal
• Obtain Company Application Reference Number
6. Hard Copy Submission
– Submit physical documents to regional RBI office
– Receive Certificate of Commencement post-verification
Essential Documents Checklist
• Notarized MOA & AOA
• Board resolution for MFI registration
• Auditor’s NOF confirmation
• CA certificate on corporate affiliations
• Directors’ qualification proofs
NYAY SARTHI INDIA FILINGS ensures:
✔ RBI-compliant documentation
✔ End-to-end process management
✔ Post-registration advisory
Documentation Requirements for Shareholders/Directors
By NYAY SARTHI INDIA FILINGS
Mandatory KYC Documents:
✓ Identity Proof:
PAN card copy (self-attested)
Aadhaar card copy (self-attested)
✓ Address Proof (Any One):
Bank statement (last 3 months)
Mobile/telephone bill (not older than 2 months)
Utility bill (electricity/water/gas)
✓ Additional Requirement:
Recent passport-size photograph
NYAY SARTHI INDIA FILINGS Tip: All documents must be clear, legible copies without alterations.
Registered Office Documentation Requirements
By NYAY SARTHI INDIA FILINGS
Essential Documents:
Address Proof (Any One):
✓ Electricity bill (not older than 2 months)
✓ Gas/water utility bill
✓ Municipal tax receipt
Ownership Proof:
• Property deed/lease agreement
• Latest maintenance bill
No Objection Certificate (NOC):
From owner (if rented premises)
Format: On ₹100 stamp paper with notarization
NYAY SARTHI INDIA FILINGS ensures:
✔ Document verification for compliance
✔ NOC drafting assistance
✔ Seamless registration process
Permissible Charges for Microfinance Companies
By NYAY SARTHI INDIA FILINGS
1. Interest Rate Cap
• Maximum APR: 26% (including all fees)
2. Processing Fees
✓ Strictly limited to 1% of loan principal
✓ No hidden administrative charges permitted
3. Insurance Premiums
• Only actual costs allowed for:
Life insurance
Health coverage
Group policies
• Zero mark-up permitted (RBI compliant)
NYAY SARTHI INDIA FILINGS ensures full compliance with RBI microfinance regulations.
Microfinance Interest Rate Calculation
By NYAY SARTHI INDIA FILINGS
Regulatory Pricing Framework:
MFIs must charge the lower of:
Base Rate Formula
✓ Last reported average base rate: 9.35% (April 2017)
✓ Maximum = 9.35% × 2.75 = 25.71%
Cost-Plus Formula
✓ Actual cost of funds + 12% margin
Key Compliance Requirement:
• Final interest rate must not exceed 26% (including all charges)
NYAY SARTHI INDIA FILINGS ensures accurate rate calculation per RBI guidelines.
Funding Guidelines for Section 8 Companies & NBFCs
By NYAY SARTHI INDIA FILINGS
For Section 8 Microfinance Companies:
✖ Deposit Acceptance: Strictly prohibited
✓ Permitted Funding Sources:
Initial capital (minimum ₹1 lakh)
Donations/grants
Retained earnings
For NBFC Registration:
Initial Phase:
Register as non-deposit taking NBFC (₹5 crore capital)
Operate for 2+ years with clean track record
Deposit-Taking Status:
• Separate RBI approval required
• Additional net owned fund requirements apply
Strategic Recommendation:
→ Begin as Section 8 Company to:
Test operational capabilities
Build financial credibility
Transition to NBFC later
NYAY SARTHI INDIA FILINGS provides:
✔ Regulatory-compliant structuring
✔ RBI licensing support
✔ Funding strategy advisory
Key Features of Microfinance Loans
By NYAY SARTHI INDIA FILINGS
Loan Structure:
✓ Type: Unsecured (no collateral)
✓ Repayment: Weekly/Monthly installments
✓ Interest Range: 20-26% p.a.
Critical Regulations:
Interest Calculation:
Only reducing balance method permitted
Rate Variations:
Max 4% differential between customer categories
Transparency Measures:
• Mandatory loan cards with full terms
• Effective interest rate display in all offices
NPA Classification:
90+ days overdue = Non-performing asset
Exemption: Section 8 companies
NYAY SARTHI INDIA FILINGS ensures full compliance with RBI microfinance guidelines.
Essential Compliance for Microfinance Companies
By NYAY SARTHI INDIA FILINGS
1. Companies Act Requirements
✓ Mandatory for Section 8 companies
✓ Includes governance, reporting and auditing standards
2. RBI Guidelines
• Applicable even without formal registration
• Covers:
Fair practices code
Interest rate caps
Transparency norms
3. Additional Regulations
✓ PMLA (Anti-Money Laundering) compliance
✓ State-specific microfinance laws
✓ Data protection rules
NYAY SARTHI INDIA FILINGS provides:
✔ End-to-end compliance management
✔ Regulatory gap analysis
✔ Audit readiness support