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Micro Finance Company Registration

Empowering small businesses and entrepreneurs with financial inclusion. Register your Section 8 Micro Finance Company today.

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What is a Micro Finance Company?

A Micro Finance Company (MFC) is a financial institution that provides small loans and financial services to low-income individuals or groups who lack access to traditional banking services. In India, these companies play a vital role in financial inclusion by empowering small entrepreneurs and rural businesses.

The most popular way to register a Micro Finance Company in India is through a Section 8 Company (Non-Profit Organization) under the Companies Act, 2013. This model allows you to lend money without a high minimum capital requirement, unlike NBFCs (Non-Banking Financial Companies). Taxcrafted Solutions helps you navigate the legal framework to set up your MFC efficiently.

Registration Process

  • Name Approval (RUN Service)
  • DSC & DIN for Directors
  • MOA & AOA Drafting
  • Section 8 License Application
  • Certificate of Incorporation

Key Benefits

  • No Minimum Capital Requirement
  • Easier Compliance vs. NBFC
  • RBI Exemption (for Section 8)
  • Give Loans up to ₹50,000
  • Promote Financial Inclusion

Requirements & Compliance

Everything you need to get started and stay compliant.

Documents Required

  • PAN Card of Directors
  • ID Proof (Aadhaar/Voter ID)
  • Latest Passport Photos
  • Rent Agreement/NOC (Office)
  • Utility Bill (Office Address)

Legal Compliance

  • Annual Filing with ROC
  • Income Tax Return Filing
  • Maintenance of Accounts
  • Statutory Audit
  • Board Meetings

Operational Rules

  • Lending only to Members
  • Max Loan Limit ₹50,000
  • Reasonable Interest Rates
  • No Public Deposits (Section 8)
  • Social Welfare Objective

Start Your Micro Finance Business

Help communities grow by providing essential financial services. Let us handle the registration.

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Frequently Asked Questions

Common queries about Micro Finance Company Registration.

What is a Section 8 Micro Finance Company?
A Section 8 Micro Finance Company is a non-profit organization registered under the Companies Act, 2013. It is allowed to provide small loans (micro-credit) to low-income groups without requiring RBI approval, provided it adheres to certain lending caps (usually up to ₹50,000 per borrower).
Is RBI approval required for Section 8 Micro Finance?
No, Section 8 companies engaged in micro-credit activities are generally exempted from obtaining a rigorous NBFC license from the RBI, provided they follow specific guidelines regarding loan size and interest rates.
What is the maximum loan amount I can give?
Typically, under the Section 8 model, you can lend up to ₹50,000 for business purposes and ₹1,25,000 for dwelling purposes to a single borrower. For NBFC-MFI, the limits are higher but come with stricter compliance.
Can a Micro Finance Company accept deposits?
No, a Section 8 Micro Finance Company or a standard NBFC-MFI cannot accept demand deposits (like savings or fixed deposits) from the public. They can only lend money from their own funds or borrowed capital.
What is the minimum capital required to start?
For a Section 8 Micro Finance Company, there is no specific minimum paid-up capital requirement, though a starting capital of ₹1 Lakh is recommended. For a full-fledged NBFC-MFI registered with RBI, the minimum Net Owned Fund (NOF) required is ₹5 Crores (₹2 Crores for NE states).
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