|Minimum Order Quantity||1 per unit|
|Type Of Ownership||Private Limited|
|Company Location||Pan India|
|Project Duration||15-30 days|
|Mode Of Service||Offline & Online|
|Type Of Registration File||E-Filing|
The Micro finance Company is basically the financial institutions that provide small-scale financial services in the form of loan, credit or savings. Therefore it is commonly named as a Micro-credit, Micro-benefit organization. They offer small loans to various small businesses or households that do not have access to formal banking channels or eligibility for loans.
They provide small loans that are less than Rs.50,000 for rural areas and for urban it is Rs.1,25,000. The simplest way to register a Microfinance Company in India is to register the Section-8 Company with MCA (Ministry of Corporate Affairs). Without charging any marginal money or guarantee security. It can give loans at inexpensive rates directed by the RBI and central government. They are a huge support to all rural and agricultural development including income and employment creation.
Main Features of Section-8 Micro Finance Company
· RBI approval is not required.
· No need of minimum capital of Rs. 2 Crores.
· Minimum Compliances.
· Can give unsecured loan to small business of Rs.50,000.
· Can give loan for dwelling residence up to Rs.1.25 lakh.
· Section-8 company have to follow the RBI guidelines on interest rate and processing charges.
· It is a legal finance business and you can sue the defaulter in case of non-payment of loan amount.
· In India, finance businesses are authorised only to Non-Banking Finance Companies (NBFC) and governed by RBI. NBFCs are required to get registration with RBI and comply with RBI guidelines. However, some business forms have been given exemption by the Reserve Bank of India (RBI) to do finance activities up to a certain extent.
· The Reserve Bank of India through its master circular RBI/2015-16/15 DNBR (PD) CC.No.052/03.10.119/2015-16 Dated July 01 2015 has exempted all Section 8 Companies engaged in micro finance activities.
· As per Para 2 (iii), Sections 45-IA, 45-IB and 45-IC of the Reserve Bank of India Act, 1934 (2 of 1934) shall not apply to any non-banking financial company which is engaged in below mentioned activities:
· (a) Engaged in micro financing activities, providing credit not exceeding Rs. 50,000 for a business enterprise and Rs. 1,25,000 for meeting the cost of a dwelling unit to any poor person for enabling him to raise his level of income and standard of living; and.
· (b) Licensed under Section 8 of the Companies Act, 2013; and.
· (c) Not accepting public deposits as defined in paragraph 2(1) (xii) of Notification No. 118 /DG (SPT)-98 dated January 31, 1998.