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MicroFinance Co.
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- MicroFinance (Sec-8) Company
- CRIF Highmark Credit Score
- MicroMuneem Accounting Software
- ENach Auto Debit Services by ICICI Bank
- Expert support by Adv Mohit Singh
- Funding Assistance upto 10 crores
- Compliance Assurance
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What is MicroFinance Company?
Set Up Your Micro Finance Business with Vakilgiri’s Comprehensive Support!
It is a known fact that only 20.77% of the total population of the country has access to bank loan facilities due to reasons like lack of awareness among rural people, illiteracy, etc. Out of this 20.77%, only 8.63% are eligible for bank loans as the banks have very strict criteria for loan eligibility thus, depriving a large chunk of the population from the benefits of credit facilities from organized lending channels of the country.
To provide easy and seamless access to the short term credit facilities to the poor and needy people of the country, the Government of India along with RBI has introduced the concept of Micro Finance Companies in India. The basic objective behind these companies is to provide short term credit facilities to that section of society which is either having no access to the banking channels or is ineligible to meet the hefty banking criteria.
There are 2 types of Micro Finance Companies which are popular in India:
1) Micro-Finance Company Registration: This type of Micro Finance Company is not required to register itself with the RBI and thus is not required to maintain a minimum NOF of Rs. 2 Crores.
2) Non Banking Finance Company- Micro Finance Institutions: This type of Micro Finance Company has to get itself registered with RBI separately. It also has to maintain a minimum Net Owned Funds (NOF) of Rs. 2 Crores to Rs. 5 Crores, depending on states to states.
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What we offer to accelerate your
MicroFinance Business
We don’t just get your tax return filed within a day but get you maximum refunds in shortest time.
CRIF High Mark Credit Score
Guaranteed access to CRIF Highmark Portal to check and update your Client's Credit Score and more. Increase your Recoveries through Credit Score Management.
MicroMuneem Accounting Software
Manage Clients, Staff, Interest, Loans, Disbursements, EMIs & more with the best MicroMuneem Accounting Software specifically developed for MicroFinance Companies.
Funding Assurance upto Rs.10 Crores
Grow your MicroFinance Business with our Guaranteed Funding assistance from Banks & NBFCs. Avail Funding benefits upto Rs.10 Crores.
ENach Auto Debit Services by ICICI Bank
Auto collect EMIs from your Clients directly in your Bank Account via Enach Auto debit Services from Various Banks. Automate processes and skyrocket your growth.
Features of MicroFinance (Sec-8) Company
Why most people choose MicroFinance as compared to other Business entities
Separate Legal Entity
Just like any other company, Microfinance Section 8 Company, its directors and shareholders are distinct persons and have a separate identity Thus, their liabilities in the company are limited to the shares of the company held by them.
Loans to small business houses and to poors for dwellings
Section 8 Microfinance Company provides unsecured loans to small businesses of upto Rs. 50,000/- & to poor people for their dwelling residence of upto Rs. 1,25,000/- thus helping in the upliftment of the poor & weaker sections of the society.
No prior RBI Approval
Unlike any other Micro Finance Companies, the Micro Finance Section-8 Company is not required to take any prior RBI approval/ registration. However, Micro Finance Section-8 Company is also governed by the RBI guidelines after its incorporation.
No Minimum Capital Requirement
The RBI has exempted the Micro Finance Company to have any minimum paid-up capital requirements which means, you can start your microfinance business with nominal amount.
Upliftment of weaker section of the society
Microfinance Company is incorporated with the objective to provide short term credit facilities to that section of society which is either having no access to the banking channels or is ineligible to meet the hefty banking criteria.
No Minimum Capital Requirement
The RBI has exempted the Micro Finance Company to have any minimum paid-up capital requirements which means, you can start your microfinance business with nominal amount.
Minimum Compliances
Microfinance Section-8 Company have the advantage of less legal compliances over the other type of micro finance companies.
Steady Source of Income
Microfinance Section 8 Company enjoys the benefit of having a steady income in the form of Interest income.
Earn interest upto 26% p.a
A Microfinance Section 8 Company can earn interest upto 26% p.a on loans advanced. Thus, it gives an additional edge to the Section 8 Micro FInance Companies over organised banking sector.
Documents required
This is all we need from you
- PAN Card or Passport (Foreign Nationals & NRIs)
- Copy of Aadhaar Card
- Passport-sized Photograh
- Mobile Number & Email Ids
- 2 months latest bank statement/ telephone or mobile bill/ electricity or gas bill
- Latest Electricity Bill/ Mobile Bill for Registered Office
MicroFinance Reg. Process
More simple than it looks!
1. Preprations of Digital Signature (DSC)
1st we apply for DSCs of all the Directors & members. Digital Signatures are required for signing all the documents while incorporating your Section 8 Micro Finance company.
2. Filing Application for Director's DIN
The next step is the application of Director Identification Number (DIN). It is the unique number allotted by the MCA to each of the directors of the Section 8 Micro Finance Company.
3. Choosing Unique Name
Meanwhile applying for your DSCs, we help you in selecting Unique Name for your dream Section 8 Micro Finance Company. This process completes in a single day.
4. Preparing Forms and Documents
After the approval of the Company’s name, we prepare all the e-forms and other documents.
5. Filing e-forms with MCA
After completing all the formalities and documentation work, we upload e-forms along with the attachments prepared in step-4 on the MCA portal for approval.
6. Allotment of COI, PAN & TAN
The department will allot Certificate of Incorporation for your Section 8 Microfinance Company along with company's PAN & TAN. You can now open Current Bank Account and start the operations. CONGRATULATIONS...
FAQs
Few doubts important to be resolved quickly
Micro Finance Company can charge upto 26% p.a on the money advanced by it.
The Micro Finance Company can charge processing fees maximum upto 1% of the gross loan amount sanctioned by it.
You can expect an annual expenditure of around Rs.25000 which involves 3 important aspects: Accounting & Auditing, Annual Compliance & Misc. Compliance expenditure.
A Micro Finance Section-8 Company can give only unsecured loan to small business houses of amount upto Rs.50,000/- and to the poor people for their dwelling residence of amount upto Rs.1,25,000/-
No, a Micro Finance Section-8 Company is not allowed to accept any kind of deposits from anyone.
No, Section 8 Micro Finance Company is strictly prohibited from accepting any kind of security against loan provided by it. It means that Section 8 Micro Finance Company is only allowed to extend unsecured loans to its borrowers.
No, Section 8 Micro Finance Company is strictly prohibited for charging any prepayment penalty on early repayment of the loan.
Registration of Micro Finance Company can be completed with just 2 members acting as the subscriber of its MOA and AOA.
No, Section 8 Microfinance Company registration process is a fully online process as all the documents and e-forms are to be filed electronically on MCA Portal. Thus, the physical presence of any of the directors or shareholders is not required at all.
The DSC is just like your ordinary signature having extra security features like encryption, etc. It enables you to sign the documents like PDF electronically.
MOA & AOA contains all the rules, vision and mission of your Section 8 Micro Finance company, and defines the exact roles and responsibilities of shareholders and directors.
There is no minimum paid-up capital requirements for the Incorporation of Section 8 Micro Finance Company as in the case of other Microfinance Companies. This means you can start a Micro Finance Company with a nominal amount.
No, Section 8 Micro Finance Company is not required to take any prior approval of RBI before starting its lending business. Thus, the Company can start its lending business as soon as it gets incorporated. However, Section 8 Micro Finance Company is required to comply with the RBI guidelines.
It is mandatory for the Section 8 Micro Finance Company to include the words foundation, Forum, Association, Federation, Chambers, Confederation, council, Electoral trust and the like etc.
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