How to register a Microfinance company?

A Microfinance company is usually called Micro Credit Organization which deals in common loans. It is less than Rs. 50000 to different small companies and households that have no access to banking channels or not eligible to get loans.

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Microfinance Company Registration Procedure in India :

Company Registration –
The first step in MFI (Microfinance Institution) registration is to incorporate a company either as Private Limited Company or Public Limited Company according to Companies Act, 2013. At first, the company can be incorporated with the capital of Rs. 1,00,000.

Raise Capital –
The next step is to raise authorized and paid up share capital up to Rs. 5 Crore or Rs. 2 Crore as the condition may be. It must be raised in the type of equity Share Capital and not Preference Share Capital.

Opening Bank Account –
After registration of the company, the amount obtained shall be deposited in a bank account in the form of Fixed Deposit. After this, a certificate of no lien shall be acquired from the bank. This certificate shall be attached with an application that will be submitted with the RBI.

Application for Microfinance Company Registration with RBI –
The next step is to get all the certified copies and submit it with the RBI for performing business Operations. Following are needed to be submitted :

• Copy of an extract of the main object clause in MOA
• Copy of Certificate of Incorporation
• Bankers Certificate of no lien in relation to Net Owned Fund
• Copy of fixed deposit receipt
• Bankers Report

File Online Application –

An online application will be filed with the RBI for Microfinance Company Registration. After filing of an application, the company will obtain Company Application Reference Number.

Submission of Hard Copy –
Once an online application is filed, a hard copy of the application with the required documents will be submitted with the regional office of the Reserve Bank of India. On obtaining the application, RBI will carry out due diligence and after satisfaction, RBI will give a certificate of commencement of business.

Necessary Documents for MFI Registration in India :

• Certified copy of Memorandum and Articles of Association (MOA & AOA) of the Company
• Duly Certified copy of Certificate of Incorporation of a company
• Board Resolution corresponding to the proposed Microfinance company registration
• Report of Banker
• Auditors report about receiving of the minimum net owned fund (NOF) of the applicant company

A certificate of Chartered Accountant about details of associate/group/ holding companies/ subsidiary with the details of investments in other NBFCs as displayed in the Performa Balance Sheet

A certified copy of the professional qualification and highest educational of all the proposed directors of an applicant company

FOR SHAREHOLDERS OR DIRECTORS :

• Photocopy of PAN card
• Photocopy of Aadhaar card
• Passport Size Photo
• Address Proof such as mobile bill, bank statement, telephone bill
• FOR REGISTERD OFFICE :
• Proof of ownership like electricity bill and others
• Utility bill such as electricity bill and gas bill
• NOC