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Micro Finance Company

Simplifying the process of company incorporation for your business.

What is a Micro Finance Company?

A microfinance company provides small loans, savings, insurance, and financial services to underserved individuals and businesses, promoting financial inclusion and poverty alleviation, particularly in developing regions.

  • Provides small loans to low-income individuals or small businesses.
  • Offers savings accounts and basic financial services.
  • Targets populations without access to traditional banking.
  • Aims to reduce poverty and promote economic development.

Why Choose Micro Finance Company?

  1. Access to credit: Provides loans to individuals or businesses without traditional banking access.
  2. Low-interest rates: Typically offers affordable lending rates compared to traditional financial institutions.
  3. Financial inclusion: Helps underserved communities gain financial independence and improve economic opportunities.
  4. Flexible terms: Loan terms and repayment schedules are often tailored to suit the borrower’s income and circumstances.

Documents Required for Micro Finance Company Registration.

  • Partners’ Documents:
    • ID proof, address proof, PAN card
    • Partnership deed, bank statement, photos
  • Registered Office Proof:
    • Address proof, rental agreement, NOC (if renting)
    • Certificate of incorporation, affidavit
  • Additional Requirements:
    • Business plan, tax registration, license application
    • Proof of capital, AML/KYC compliance, board resolution

Mandatory Criteria for Micro Finance Company

  • Minimum Capital Requirement: A specified minimum capital as mandated by the regulatory authority (e.g., central bank or financial regulator).
  • Legal Structure: Must be registered as a legal entity (e.g., limited company, partnership, or non-profit).
  • Operational Area: Must operate within specific geographic boundaries or target underserved areas.
  • Regulatory Approval: Must obtain a license or approval from the relevant financial regulatory body.
  • Ownership: Defined rules regarding the ownership structure, with limits on the percentage of foreign or institutional ownership.
  • Management: Qualified management team with relevant experience in finance or microfinance.
  • Financial Inclusion Focus: Primary goal should be financial inclusion, serving underserved or low-income populations.
  • Loan Size and Interest Rates: Must adhere to limits on loan sizes, interest rates, and repayment terms as set by regulators.
  • Transparency and Reporting: Requirement for regular reporting, audits, and compliance with Anti-Money Laundering (AML) and Know Your Customer (KYC) norms.
  • Social Impact: Emphasis on poverty alleviation and social development through financial services.

Steps to Register

Determine Legal Structure

Choose the appropriate legal entity (e.g., private limited company, partnership) for the microfinance company.

Prepare Documents

Gather necessary documents, including the business plan, partner details, registered office proof, and compliance with AML/KYC.

Meet Capital Requirements

Ensure the minimum capital requirement is met, as mandated by the relevant regulatory authority.

Apply for License

Submit an application for registration with the financial regulatory authority (e.g., central bank) and provide necessary documents.

Establish Governance

Appoint qualified management and create an operational structure, including policies on loan disbursement, interest rates, and repayments.

Compliance and Reporting

Set up systems for regular audits, financial reporting, and compliance with regulations, including anti-money laundering and customer verification policies.

Get Your Micro Finance Company Registered
@ just Rs.14,999/-

Click here