Microfinance Company Registration

Microfinance is the business of providing small-value loans to low-income households. It can be carried on in two main ways: as an NBFC-MFI registered with the RBI, or, on a smaller and not-for-profit scale, through a Section 8 company.

An NBFC-MFI must meet the RBI's Net Owned Funds and qualifying-asset norms; the Section 8 route operates under an RBI exemption up to a limit and suits not-for-profit microfinance.

• Incorporation documents (company or Section 8 company)
• Net Owned Funds proof and audited accounts (for NBFC-MFI)
• Directors' KYC and fit-and-proper declarations
• A business plan for the microfinance activity

1. 01

   Choose the route

   Decide between an NBFC-MFI and a Section 8 company, based on scale and purpose.

2. 02

   Incorporate and capitalise

   Incorporate the entity and arrange the required funds.

3. 03

   Register where required

   For an NBFC-MFI, apply to the RBI for the Certificate of Registration.

4. 04

   Set up operations

   Put the lending, conduct, and compliance framework in place.

PBT helps you choose the route and set up microfinance correctly.

• We advise on the NBFC-MFI versus Section 8 route
• We incorporate and structure the entity
• We manage the RBI registration where it applies
• We set up the compliance framework
• Scope and fees agreed in writing up front

• What are the ways to do microfinance?

  As an NBFC-MFI registered with the RBI, or, on a smaller not-for-profit scale, through a Section 8 company.

• Which route suits me?

  It depends on scale and purpose — for-profit lending at scale points to an NBFC-MFI; not-for-profit work can use the Section 8 route. We help you choose.

• How long does it take?

  The Section 8 route is faster; an NBFC-MFI involves RBI processing over several months.