{"id":17629,"date":"2020-10-09T14:55:20","date_gmt":"2020-10-09T09:25:20","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=17629"},"modified":"2021-10-11T16:54:06","modified_gmt":"2021-10-11T11:24:06","slug":"nbfc-mfis-registration-and-requirements","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/nbfc-mfis-registration-and-requirements\/","title":{"rendered":"NBFC MFIs Registration and requirements: A Detailed Overview"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Finance and credit are crucial for the prosperity of low and middle-income groups. Unfortunately, the majority of the population that resides in this income group does not have an access to proper banks or financial houses from which they can avail easy credit. Stringent RBI\u2019s guidelines have made these financial institutes inaccessible to these people. But the advent of the non-banking financial institution and MFIs resolve this problem to some extent. Now the people with low income can avail the hassle-free credit from these institutions. Here will be going to discuss <a href=\"https:\/\/corpbiz.io\/nbfc-registration\"><strong>NBFC<\/strong><\/a> MFIs Registration and requirements.&nbsp; &nbsp; &nbsp; &nbsp;&nbsp;<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/nbfc-mfis-registration-and-requirements\/#Comparative_Study_Recognising_MFI_as_NBFC\" >Comparative Study Recognising MFI as NBFC<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/nbfc-mfis-registration-and-requirements\/#Objectives_of_the_Microfinance_Company\" >Objectives of the Microfinance Company&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/nbfc-mfis-registration-and-requirements\/#Guidelines_Complying_NBFC_and_Micro_Finance_Institution\" >Guidelines Complying NBFC\nand Micro Finance Institution<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/nbfc-mfis-registration-and-requirements\/#Document_required_for_NBFC_MFIs_Registration\" >Document required for NBFC MFIs Registration<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/nbfc-mfis-registration-and-requirements\/#Procedure_for_the_Microfinance_Company_Registration\" >Procedure for the Microfinance Company Registration<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/nbfc-mfis-registration-and-requirements\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Comparative_Study_Recognising_MFI_as_NBFC\"><\/span>Comparative Study Recognising MFI as NBFC<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Micro Finance Institution is a form of Non-Banking Financial Company (NFBC) which offers financial services to the individuals and small scale enterprise. It is also recognized as Micro Finance Institution (MFI). Micro-finance activities in our country is performed by the business models such as <a href=\"https:\/\/corpbiz.io\/ngo-registration\"><strong>NGOs<\/strong><\/a> (Society, Trust, Section 8 companies) and Profit oriented companies like NBFC MFI.&nbsp;<\/p>\n\n\n\n<p>Non-Banking financial companies provide\nspecific types of financing services but do not possess the banking license.\nSuch companies are registered under the Companies Act and involve in the\nbusiness of credit and advances, acquisition of stocks, share, and debentures\nissued by the local authority or Government. It does not serve any activities\nrelated to industrial, agriculture, or trading of goods.&nbsp;<\/p>\n\n\n\n<p><a href=\"https:\/\/corpbiz.io\/microfinance-company-registration\"><strong>Microfinance companies<\/strong><\/a> on the other hand is deemed as secondary banking structure which aims to render financial services to the lower strata of the society, who do have access to financial services.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Objectives_of_the_Microfinance_Company\"><\/span>Objectives of the Microfinance Company&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>To render financial aid to the needy people to meet their basic requirements and improve their standard of living.&nbsp;&nbsp;<\/li><li>To keep leveraging the financing scheme that can benefit the lower strata of the society.<\/li><li>To extend their credit portfolio that even covers the scope of loans for small businesses, so that they can ramp up employment within the region where they are operating.&nbsp;<\/li><li>To advocates the sense of self-employment in the rural and backward areas.&nbsp;<\/li><li>To launch schemes that provides vocational skills.&nbsp;<\/li><\/ul>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/types-of-nbfcs-in-india\/\">Types of NBFCs in India \u2013 An Overview<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Guidelines_Complying_NBFC_and_Micro_Finance_Institution\"><\/span>Guidelines Complying NBFC\nand Micro Finance Institution<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>NBFC-MFIs needs to hold a\nminimum net owned funds of Rs Five crore. For NBFC-MFIs working in the\nNorth-Eastern region requires maintaining a minimum NOF of up to Rs two\ncrore.&nbsp;<\/li><li>NBFC MFIs must fulfill the\nminimum criteria of Qualifying Assets which is capped at 85% of the net assets.<\/li><li>The income generated from the\nremaining 15 percent of assets should be in pursuant to regulations set up by\nthe concerned authorities.&nbsp;<\/li><li>An NBFC not working as an NBFC &amp;\nMFI shall not provide loans extension to microfinance sector.&nbsp;<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Document_required_for_NBFC_MFIs_Registration\"><\/span>Document required for NBFC MFIs Registration<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>The following list encloses the type of documents required from all the members of the company:-<\/em><\/strong><\/p>\n\n\n\n<ul><li>Incorporation Certificate\n(Certified copy)<\/li><li>Memorandum of Association (certified\ncopy)<\/li><li>Article of Association\n(certified copy)<\/li><li>Banker\u2019s report&nbsp;<\/li><li>Copy of board resolutions&nbsp;<\/li><li>Auditors report displaying the\nminimum net owned fund of the applicant.<\/li><li>Certificate sanctioned by the\nCA showing detail of companies along with investment particulars made in other\nNBFCs as per the given format.&nbsp;<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Procedure_for_the_Microfinance_Company_Registration\"><\/span>Procedure for the Microfinance Company Registration<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"797\" height=\"350\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/10\/image-33.png\" alt=\"Microfinance Company Registration\" class=\"wp-image-17631\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/10\/image-33.png 797w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/10\/image-33-300x132.png 300w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/10\/image-33-768x337.png 768w\" sizes=\"(max-width: 797px) 100vw, 797px\" \/><\/figure><\/div>\n\n\n\n<p><strong>Step 1:<\/strong>&nbsp;the first and foremost step in the registration of such institutions is to get a company required either as a private limited company or <a href=\"https:\/\/corpbiz.io\/public-limited-company-registration\"><strong>public limited company<\/strong><\/a> as per regulations of the <em><strong>Companies Act, 2013<\/strong><\/em><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Companies_Act_2013\"><em><strong>[1]<\/strong><\/em><\/a><\/sup>. Initially, the capital of one lakh can be sufficient to incorporate micro finance companies. Once you are done with this step, you can proceed to the next step.<\/p>\n\n\n\n<p><strong>Step 2:<\/strong> The\nnext stage is to raise a paid-up capital of up to 2 crores or 5 crores as the\ncase may be. Furthermore, capital ought to raise only in the form of equity\nshare capital<\/p>\n\n\n\n<p><strong>Step 3:<\/strong> Once\nthe incorporation is done, the next step to submit the received amount in the\nform of a fixed deposit in the bank account. Then a certification of the no\ndues will be obtained from the bank. The applicant needs to annex the said\ncertificate with an application and forward it to the Reserve Bank.<\/p>\n\n\n\n<p><strong>Step 4:<\/strong> The\nlast step in the process to arrange the following documents and submit them to\nthe RBI for executing business activities.&nbsp;<\/p>\n\n\n\n<ul><li>Bankers certification regarding\nNOF, aka no lien certification.&nbsp;<\/li><li>Copy of Memorandum of\nAssociation<\/li><li>Copy of Article of Association<\/li><li>Bankers report.<\/li><\/ul>\n\n\n\n<p><strong>Step 5:<\/strong> In\nthis step, the applicant requires to file an application with RBI on a\ndedicated online portal. Upon the completion of the application, the applicant\nshall receive an application reference number that helps them track the\napplication\u2019s status.&nbsp;<\/p>\n\n\n\n<p><strong>Step 6:<\/strong>\nAfter applying, the applicant requires to submit the hard copy of the\napplication at the regional office of the Reserve Bank. Upon acceptance of the\napplication, RBI will check the same on the predetermined ground and will\nfinally issue the commencement certification to the application.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p> NBFC-MFIs are nothing short of a savoir for those who often fail to avail credit from banks due to tons of compliances. They are extremely necessary for lower and the middle-income group that doesn\u2019t have an access to mainstream finance houses. If you ready to keep up with RBI\u2019s compliances, then executing such a business could be a profitable proposition for you. Feel free to contact the <a href=\"https:\/\/corpbiz.io\/\"><strong>CorpBiz<\/strong><\/a> team for the NBFC MFIs Registration and requirements. With years of expertise in finance and licensing fields under the belt, Corpbiz believes in providing unparalleled services to its customers. <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/step-by-step-nbfc-registration-procedure\/\">NBFC Registration: Step by Step Procedure<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Finance and credit are crucial for the prosperity of low and middle-income groups. Unfortunately, the majority of the population that resides in this income group does not have an access to proper banks or financial houses from which they can avail easy credit. Stringent RBI\u2019s guidelines have made these financial institutes inaccessible to these people. [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":17642,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[91],"tags":[1085],"acf":{"service_id":"8"},"authorName":"Pankaj Tyagi","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/MicrosoftTeams-image-42.jpg","authorDescription":"Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.","postViews":4795,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/17629"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=17629"}],"version-history":[{"count":8,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/17629\/revisions"}],"predecessor-version":[{"id":36422,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/17629\/revisions\/36422"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/17642"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=17629"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=17629"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=17629"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}