{"id":19050,"date":"2020-11-06T14:23:00","date_gmt":"2020-11-06T08:53:00","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=19050"},"modified":"2020-11-06T14:26:09","modified_gmt":"2020-11-06T08:56:09","slug":"how-to-get-loans-under-nidhi-scheme","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/how-to-get-loans-under-nidhi-scheme\/","title":{"rendered":"How to get Loans under Nidhi Scheme?"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Nidhi Companies have become a growing trend in India. Small financers are being greatly benefitted by incorporating a Nidhi Company. A Nidhi Company requires a low capital, few members and some basic documents for its incorporation. Since, such companies are made only for the mutual benefits of its members or shareholders, so there is less risk as there will be no external factors. In this article, we have covered everything you need to know about Loans under Nidhi Scheme.<\/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\/how-to-get-loans-under-nidhi-scheme\/#Source_of_Funding_for_Nidhi_Company\" >Source of Funding\nfor Nidhi Company<\/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\/how-to-get-loans-under-nidhi-scheme\/#Loans_under_Nidhi_Company\" >Loans under\nNidhi Company<\/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\/how-to-get-loans-under-nidhi-scheme\/#Securities_under_Nidhi_Scheme\" >Securities under Nidhi Scheme<\/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\/how-to-get-loans-under-nidhi-scheme\/#Other_relevant_Circumstances_under_Nidhi_Scheme\" >Other relevant Circumstances under Nidhi Scheme &nbsp;<\/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\/how-to-get-loans-under-nidhi-scheme\/#Loans_not_Allowed_by_Nidhi_Scheme\" >Loans not Allowed\nby Nidhi Scheme<\/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\/how-to-get-loans-under-nidhi-scheme\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Source_of_Funding_for_Nidhi_Company\"><\/span>Source of Funding\nfor Nidhi Company <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The main source of funding for the company comes from its members or shareholders in the form of deposits. Loans are granted by the Nidhi Company at relatively reasonable rates to its members for house construction, or maintenance, so that they can be benefitted at large. After <a href=\"https:\/\/corpbiz.io\/nidhi-company-registration\"><strong>Nidhi Company Registration<\/strong><\/a>, the companies are governed by <strong><em>Nidhi Rules 2014, Companies Act, 2013<\/em><\/strong> and some of the <em><strong>Financial Activities<\/strong><\/em> of Nidhi Scheme are governed by <strong><em>Reserve Bank of India Act, 1934<\/em><\/strong>. <\/p>\n\n\n\n<p>The Nidhi Companies are mainly formed to encourage people to imbibe into the habit of savings so that they can easily face the challenge of financial needs, when the need arises.<\/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\/restrictions-on-operating-nidhi-company\/\">Operating Nidhi Company; Know about the Restrictions on Nidhi Company<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Loans_under_Nidhi_Company\"><\/span>Loans under\nNidhi Company<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The Nidhi Companies provide loans and accept deposits from its members or shareholders only. Under the Nidhi Scheme, there are many provisions of the loans which are governed by them. The amount of interest which is levied on loans under the scheme should amount to at least the rate of interest as prescribed by the <em><strong>Reserve Bank of India<\/strong><\/em><sup><a href=\"https:\/\/www.rbi.org.in\/\"><em><strong>[1]<\/strong><\/em><\/a><\/sup> (RBI). <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Loans under Nidhi Scheme<\/h3>\n\n\n\n<p><strong><em>The following points should be kept in mind while providing loans under the Nidhi Scheme-<\/em><\/strong><\/p>\n\n\n\n<ul><li>Prior approval of Ministry of Corporate Affairs or Department of Commerce of either the Central or State Government is required to giving out any loan; <\/li><li>There are limits prescribed on the amount of loan given. If the total deposits of the Nidhi Company come below two crore rupees, then a maximum of two lakh rupees will be issued;<\/li><li>A Nidhi Company can advance loan up to fifteen lakh rupees, if the total amount of deposits is more than fifty crore rupees;<\/li><li>The Nidhi Companies are solely incorporated for the mutual benefits of its members or shareholders only. Loans provided under the Nidhi Company will be given only to its members or shareholders and not to any corporate bodies;<\/li><li>There are some restrictions on loans to be disbursed against securities. It can give loan only against the securities which is mentioned in the provision. As per the law, a Nidhi Company cannot lend any unsecured loan.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Securities_under_Nidhi_Scheme\"><\/span>Securities under Nidhi Scheme<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><em><strong>The securities under Nidhi Scheme under which the company can provide loan are as follows:-<\/strong><\/em><\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"581\" height=\"340\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/11\/image-18.png\" alt=\"Securities under Nidhi Scheme\" class=\"wp-image-19051\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/11\/image-18.png 581w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/11\/image-18-300x176.png 300w\" sizes=\"(max-width: 581px) 100vw, 581px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Security\nagainst Gold, Silver and Jewellery<\/h3>\n\n\n\n<p>This\ntype of loan is very famous amongst the people and it is famously known as gold\nloan. The repayment period of such loans should not exceed one year. The total\nvalue of such loans should not exceed the 80 percent of the total value of gold\nor silver.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Security\nagainst Immovable Property<\/h3>\n\n\n\n<p>This\ntype of loan is known as loan against Immovable Property. The repayment period\nof Immovable Property loans shall not exceed seven years and the repayment of\nthis type of loan should not exceed 50 percent. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Security\nagainst FD receipts, National Saving Certificates, Government securities and\ninsurance policies<\/h3>\n\n\n\n<p>This\ntype of loan is not very common and famous among the community. However, in the\ncase of loan against fixed deposits, the period of loan shall not exceed the\nunexpired period of the fixed deposits.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Other_relevant_Circumstances_under_Nidhi_Scheme\"><\/span>Other relevant Circumstances under Nidhi Scheme &nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><em><strong> Other instances under Nidhi Scheme related to loans are as follows-<\/strong><\/em><\/p>\n\n\n\n<ul><li>The guarantee or\nsecurity for advancement of loans is provided by the company while the credit\nis delivered to a Subsidiary Company from the financial institution. <\/li><li>If a Nidhi Company is\nnot profitable for the three previous financial years continuously, then no new\nloans above 15 percent can be obtained by the members. Those members who have\ntaken or defaulted on a loan from a Nidhi Company cannot accept new credits\nfrom such companies. <\/li><li>Only the\nrepresentatives or the members of the Nidhi Company are allowed to borrow from\nthe Nidhi Company. <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Loans_not_Allowed_by_Nidhi_Scheme\"><\/span>Loans not Allowed\nby Nidhi Scheme<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><em><strong>As per the Nidhi Scheme, there certain types of loans which are not allowed by the Nidhi Company and they are as follows:<\/strong><\/em><\/p>\n\n\n\n<ul><li>The Nidhi Companies\nare not allowed to lend money or advance any personal loans on the basis of\ncredibility or Income Tax Return. The loan must be against any security like\ngold, Immovable property, etc.<\/li><li>Micro finance businesses\nare the business which is very famous in rural and semi urban areas. But, no\nNidhi Company is allowed to advance loans or lend money in the business of\nmicro finance, other than the registered Non- Banking Financial Corporation\n(NBFC).<\/li><li>The Nidhi Companies\nare not allowed to lend money or advance loans to the business of vehicle\nfinance. Since, these categories required a net worth of Rs.2 croresand it is\nonly allowed to a registered NBFC.<\/li><li>Further, the Nidhi\nCompanies are not allowed to lend money or advance any kind of loans to the\nbusiness of Hire Purchase.<\/li><\/ul>\n\n\n\n<p>It\nis also pertinent to mentioned here that under the provision, the number of\ndeposits accepted must not exceed 20 percent of the net owned funds. Also, no\nbusiness or trust can be the company shareholder or member.<\/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>The\nNidhi Companies are regulated by Section 20A of Companies Act, 1956 and also by\nthe Nidhi Scheme, 2014. In India, where the habit of saving is the primary\nconcern of the public Nidhi Companies has proved a great boon in the society.\nThe greatest advantage that these companies has given is to revive the\nfinancial sectors of India which was lacked behind from so many years. The\nfinance business in India is highly complex and strict and so to ease down this\nsector, Nidhi Companies has been proved to be a better financial business in\nIndia. <\/p>\n\n\n\n<p>Since, the capital requirement is low, small financers has been benefitted largely by these Nidhi Companies. Also, such companies are restricted to its members or shareholders only, so there will be no external factors and no unregulated operations. As these companies have been predominant in South India, it is hoped that it will establish on a larger platform in India, sooner.<\/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\/nidhi-company-cannot-operate-like-nbfc\/\">Here\u2019s Why NIDHI Company Cannot Operate Like NBFC<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Nidhi Companies have become a growing trend in India. Small financers are being greatly benefitted by incorporating a Nidhi Company. A Nidhi Company requires a low capital, few members and some basic documents for its incorporation. Since, such companies are made only for the mutual benefits of its members or shareholders, so there is less [&hellip;]<\/p>\n","protected":false},"author":18,"featured_media":19074,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[31],"tags":[1184],"acf":{"service_id":"211"},"authorName":"Sakshi Srivastava","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/IMG-20180130-WA0007.jpg","authorDescription":"Sakshi has pursued B.B.A.LL.B.(IPR Hons.). She is an avid reader and is keen to gather and share her knowledge on the subjects relating to IPR, Company Law and GST. Priorly she has worked as a legal researcher and vide her articles she aims at improving the core knowledge of the subjects to the masses.","postViews":5133,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/19050"}],"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\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=19050"}],"version-history":[{"count":9,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/19050\/revisions"}],"predecessor-version":[{"id":19087,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/19050\/revisions\/19087"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/19074"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=19050"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=19050"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=19050"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}