Microfinance Exist at very small level than NBFC and also providing similar lending services as NBFC at smaller level. Enterslice provide complete procedure of Microfinance registration.\nhttps://enterslice.com/microfinance-company-registration
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What is an NBFC-MFI?
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.
NBFC is to be registered NBFC-MFI the minimum paid-up capital should be not less than Rs. 5 crores. If an NBFC-MFI registered in North-east region of the India the minimum paid capital requirement is only Rs. 2 Crore. NBFC-MFI has to maintain 85% as Qualifying assets all the time.
Procedure for NBFC-MFI Registration
1. Company Registration
The first step is to form a new Public Limited Company under the Companies Act.
2. Minimum 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.
3. The 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.
4. Application to RBI
Application to RBI for Business Operations.
>RBI will conduct due diligence and will issue certificate of commencement of business.
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