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Section 8 Microfinance · No RBI Approval Required

Microfinance Company Registration

Register your Microfinance Company (Section 8) online with expert CA support. Get DIN, DSC, Name Approval, MOA/AOA, PAN, TAN, EPFO & ESIC registration — at affordable prices.

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Section 8 Without RBI Approval
Digital Signature & DIN for Directors
Name Search Approval
Drafting of MOA & AOA
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Procedure

Procedure For Microfinance Company

01
Name Approval Application

Details given by you will be checked and then we will apply for name approval.

02
DSC (Digital Signature)

After submitting your documents we will give you DSC and DPIN.

03
Apply For DIN

Director Identification Number is a unique number given to existing directors of incorporated companies.

04
Certificate of Incorporation

File for Incorporation Certificate will be forming with CIN, PAN & TAN.

05
PAN & TAN Application

Apply for PAN & TAN as they will be needed for opening a bank account.

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Microfinance Company Registration
Definition

What is a Micro Finance Company?

A Microfinance Company is essentially a financial organization that provides small-scale financial services in the form of loan, credit, or savings. These organizations facilitate the credit framework for independent ventures that don't get loans from banks due to their complex process — hence they are commonly named Micro-credit associations.

They provide small loans under ₹50,000 for rural areas and ₹1,25,000 for urban areas. Registering the Section 8 Company with MCA is the easiest way to register a Micro Finance Company in India — without charging any peripheral cash or assurance security. They can give credits at reasonable rates coordinated by the RBI and central government.

There are essentially 2 kinds of microfinance organizations permitted in India: one that has to be registered with the RBI, and another that is the non-benefit type — enlisted as Section 8 Company and does not need RBI approval.

Features

Microfinance Company's Features

An organization that operates as a microfinance company must have the following characteristics.

Registered Under Companies Act

The company must be registered in accordance with the provisions of the Companies Act, 2013 or the Companies Act, 1956.

Required Net Worth

A company must have the required net worth in order to register as a microfinance institution.

License Required

The microfinance company registration is required in order to obtain the necessary license.

Serves Lower Classes

The lower classes of society are typically the clients of microfinance firms.

No Collateral Required

Smaller segments get access to banking services — typical clients work in carpentry, fishing, or other businesses. Founded with the primary goal of not requiring any kind of collaterals.

Eligibility

Who is Eligible to Register an MFI Company in India?

Farming Activities

Agricultural sector businesses

Small-Scale Businesses

Micro and small enterprises

Professional & Transport

Professional and transportation trade

Artisanal Businesses

Handicraft and artisan trades

Why Register

Why to Register for Microfinance Company?

Promoting Socio-Economic Growth

At the community level, the microfinance organization will promote socio-economic development. It is an integral asset to take out the neediness factor.

Provide a Way to Funding

It gives a superior overall loan repayment rate than conventional financial products. Helps address credit requirements for consumer loans, business loans, working capital loans, emergency loans, housing, etc.

No RBI Approval

No long techniques and simple to register as there is no RBI endorsement required when you register as a non-profit company. No requirement for minimum capital of ₹2 Crores.

Reasonable Services for Small Businesses

It centers on building a financial system for the poor and jobless — aims to make permanent local financial institutions that attract domestic deposits and recycle them into loans.

Minimum Compliances

The company is relied upon to follow RBI guidelines regardless of whether it can't enlist with the reserve bank. Section 8 company will comply with the Companies Act the same way as other companies.

Documents

Documents Required For Company Registration

For Directors & Shareholders
  • PAN card of shareholders and directors
  • Passport-size photograph (not more than 10 months old)
  • ID proof — Aadhaar / Voter ID / Passport / Driving License
  • Address proof — Electricity bill, water bill, bank statement, gas or telephone bill
For Registered Office
  • Registered office proof — Electricity bill, water bill, bank statement, gas or telephone bill
  • NOC from the owner of the registered office
  • Rent agreement (if rented property)
  • Property papers (if owned)
Advantages

Advantages of Micro Finance Company

Self-Sufficiency

Once the microfinance company is registered, all associated operations will be financially independent.

Funding

Securing funding to register a microfinance company is typically a straightforward process.

Better Repayment Rate

Microfinance firms unquestionably have a better repayment rate when compared to banks and financial institutions.

Reach Rural Areas

Microfinance companies are better able to reach rural areas and offer loan facilities. They have a wider reach than big businesses and banks.

Tax Benefits

There are a large number of tax benefits associated with registering a microfinance company in India.

No RBI Approval

No requirement for any type of RBI approval exists because there are minimal compliance requirements for establishing a microfinance company.

Interest Rate Flexibility

Microfinance companies typically have the freedom to impose high interest rates — ranging from 20% to 25%.

Promotes Entrepreneurship

Establishing this type of entity promotes entrepreneurship to fulfil the demands of the business.

Separate Legal Entity

A microfinance company must be registered under the Companies Act, 2013. Each member is a separate legal entity.

Credibility

The public is more likely to believe such an entity. There are additional loan types and disbursement options available.

Promoting Socio-Economic Growth

At the community level, the microfinance company will promote socio & economic growth — a potent tool for reducing poverty.

Affordable Services

Focuses on creating a financial system for the underprivileged and jobless — seeks to establish long-lasting local financial institutions.

Minimum Compliances

Even if a company is not required to register with the reserve bank, it is still expected to adhere to RBI standards. Section 8 company must comply with the Companies Act in the same manner.

Detailed Process

How to Register the Micro-Finance Companies in India?

The microfinance can be enrolled in India by Section 8 Company — no base capital needed.

01
Step 1: Prepare DSC & File for Name Approval

The initial step is to apply DSC and DIN. This sets aside some time for 1-2 days. It is utilized for making online structures filed with ROC for Incorporation. DSC can't be utilized in Physical Documents. The Company Registration process is completely online, so DSC is needed. Name Applications under RUN will be prepared by the Central Registration Centre (CRC). The name should end with words like Establishments, Sanstha, etc. A maximum of 6 names can be filed at one time.

02
Step 2: Apply for DIN

DIN is a unique number provided to the existing Directors of Incorporated Companies by the Central Government. Once you get the DIN, the Director can use the same for a lifetime irrespective of the company they work in. If you change the organization, it doesn't change the DIN Number.

03
Step 3: Certification of Incorporation

The third step is to file the joining alongside every single vital paper. The form is joined with all fundamental attachments like MOA, AOA, declarations, etc. The incorporation certificate must be formed with CIN, PAN, and TAN. Stamp Duty is a state subject — must be paid irrespective of the Capital. After incorporation, immediately apply for PAN and TAN as they will be required to open a Bank Account.

It takes 15-30 working days (approx.) to complete the Microfinance Company Registration process. The timeline may vary depending on responses from the MCA/ROC department.
What's Included

What is Included in Our Package?

Certificate of Microfinance Company Registration
Compliance Services
DIN & DSC for 2 Directors
Name Search & Approval
MOA / AOA
Company PAN Card
EPFO Registration
ESIC Registration
Comparison

Type of Legal Structure for Microfinance Company

Particulars NBFC-MFI Societies and Trust Section 8 Company Cooperative Society
Governed By Companies Act, 2013 with RBI Society Registration Act, 1860 / Indian Trust Act, 1882 Companies Act, 2013 Cooperative Societies Act, 2002
Net Worth Requirement ₹5 Crore (₹2 Crore for North East) No Minimum Requirement No Minimum Requirement No Minimum Requirement
Requirements

Mandatory Requirements for Micro Finance Company

There are typically 2 methods to register the Micro Finance Institution (MFI).

Method 1: NBFC with RBI Approval
  • Form a company and apply to RBI for approval
  • Minimum ₹5 crore net owned fund
  • Active profiles of investors required
  • Lengthy process and compliance
Method 2: Section 8 Company (Recommended)
  • Register a Section 8 Company with MCA
  • Maximum ₹50,000 for business motives
  • ₹1,25,000 for household dwelling
  • No minimum net owned fund requirement
  • No RBI approval required
Important

No RBI Approval Required

In India, finance businesses are endorsed distinctly to Non-Banking Finance Companies (NBFC) and directed by RBI. However, some business structures have been granted exclusion by the Reserve Bank of India (RBI) to do banking activities up to a predetermined threshold. The RBI by its master circular: RBI/2015-16/15 DNBR (PD) CC.No.052/03.10.119/2015-16 Dated July 01, 2015, has discharged all Section 8 Companies engaged with microfinance activities.

According to Para 2 (iii), Sections 45-IA, 45-IB, and 45-IC of the Reserve Bank of India Act, 1934 must not apply to any significant financial company which is involved in activities: (a) engaged in micro-financing activities, giving credit not more than ₹50,000 for a business venture, (b) ₹1,25,000 for meeting the expense of a lodging unit, (c) licensed under Section 8 of the Companies Act, 2013, and (d) not accepting public deposits as described in passage 2(1)(xii) of Notification No. 118/DG (SPT)-98 dated January 31, 1998.

Compliances

Mandatory Compliances for Micro Finance Company

RBI Compliance

The company is expected to comply with RBI norms even if it is not required to register with the reserve bank.

Company Act

Section 8 company also required to comply with the Companies Act, in the same way as other companies.

Additional Laws

There are other laws as well which are to be taken care of like PMLA etc.

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FAQ

Frequently Asked Questions

A microfinance company is a financial organization that provides small-scale financial services (loans, credit, savings) to small businesses or households who do not have access to formal banking channels. Loans are typically up to ₹50,000 for rural areas and ₹1,25,000 for urban areas.

The easiest way is to register as a Section 8 Company with MCA. Our 5-step process: Name Approval → DSC → DIN → Certificate of Incorporation → PAN & TAN. No RBI approval is needed for Section 8 Microfinance.

PAN card, passport-size photos (not older than 10 months), ID proof (Aadhaar/Voter ID/Passport/DL), address proof (utility bills/bank statement), registered office proof, NOC from owner, and rent agreement (if rented).

Benefits include: self-sufficiency, easy funding, better repayment rate, reach rural areas, tax benefits, no RBI approval, interest rate flexibility (20-25%), separate legal entity, credibility, and socio-economic growth promotion.

Our package price includes professional fees. Government fees (ROC + stamp duty) vary by state and authorized capital — these are disclosed upfront. No hidden charges. Contact us for a detailed quote.

Yes, microfinance companies can provide loans for various purposes — consumer loans, business loans, working capital loans, emergency loans, housing, etc. — as long as they comply with RBI guidelines.

Yes, microfinance companies may impose prepayment penalties as per their loan agreements and RBI guidelines. It is advisable to check the specific terms of the loan before prepaying.

Microfinance companies typically charge interest rates ranging from 20% to 25%. Loan processing charges vary by lender. For NBFC-MFIs, RBI has specific caps; for Section 8 microfinance companies, the rates must be reasonable and coordinated with RBI and central government guidelines.