Introduction
Microfinance helps in giving loans to the impoverished population and making financial services accessible to needy persons. One can set up a company for microfinance under the Right type of company, but just incorporation doesn't qualify the person to carry on business as a Non-Banking Financial Company.
Currently, the Reserve Bank of India expects an NBFC-MFI to maintain a minimum net owned funds of Indian INR 10 crores.
What is Microfinance Company Registration?
Microfinance company registration is the process of creating a qualified company and getting the authorization of the Reserve Bank of India (RBI) to operate as a non-banking financial company-microfinance institution (NBFC-MFI). Your organization must meet the required standards for multiple issues such as managing and planning your activities, and complying with governmental orders.
According to the existing RBI rules, an NBFC-MFI is defined as a non-deposit-accepting type of NBFC that implements regulatory requirements in the field of microfinance operations. In June 2025, the RBI altered the standards of qualifying assets to reach at least 60% of the total amount of assets.
Why is registering a Microfinance Business Necessary?
You have to obtain the necessary authorization for a Registered Office to conduct any regulated activities of an NBFC organization because all financial activity is controlled by the RBI.
Regulatory Compliance: Comply with the existing RBI rules
Legal Operation: Perform allowed financial operations after getting the necessary approval
Credibility: Prove that your company is legally entitled to perform financial operations
Customer Protection: Observe all borrower protection and lending requirements
Business Expansion: You can register finance company for further growth of your business in the financial sphere.
What are the types of finance businesses?
You can choose a financial activity for a finance firm registration according to your proposed business model:
Microfinance – Qualifying collateral-free microfinance loans could be provided by way of an eligible regulated entity.
General Finance – Permitted Lending Activities could be undertaken after obtaining the required Regulatory Approval.
Housing Finance - Housing finance activities are considered as per their applicable regulatory framework.
Gold Loan Business - Gold-backed lending could be undertaken if requirements for such a model is met.
Financial Services- Other Financial Activities permissible under the RBI Framework could be structured accordingly.
What is the suitable business structure?
To proceed with regulated NBFC operations, it is necessary to set up a company that fulfills the eligibility criteria and meets the requisite RBI conditions. Before setting up the new entity, it is advisable to analyze the proposed business activities, ownership, share capital and regulatory requirements.
You may refer to Company Registration for forming the corporate structure of your financial business.
What are the eligibility criteria for microfinance company registration?
When it comes to finance company registration, it is crucial that you fulfill the RBI criteria for registration purposes. The essential pre-conditions for starting any finance-related enterprise have to be as follows:
An appropriate corporate structure.
Availability of net owned funds as per the RBI criterion.
Availability of good promoters, directors and managers.
A detailed business plan.
Proper financial and governance-related structure.
All the required incorporation-related documents.
Adequate eligibility to comply with the RBI requirements about customer safety and customer services.
The RBI permits submission of the online application for NBFC registration using the PRAVAAH interface.
What Documents are required for Microfinance Company Registration?
The following documents are required for private finance company registration:
Incorporation certificate
MoA and AoA
CIN and PAN
The details of the promoters and directors
Director’s profiles
Business plan and projections
The details of capitalization and shareholding
Registered office address proof
Resolution of the board of directors
Other documents listed by the RBI.
Actual documents will differ depending on the type of NBFC and application process requirements.
How Can you Register a Microfinance Company?
You can follow the microfinance company registration process to complete the steps.
Step 1: Identify the kind of financial activity you are planning to undertake and what class of NBFC you fall under.
Step 2: Set up an NBFC entity with the appropriate objectives set out in its documents.
Step 3: Arrange the required funding and conduct a business plan.
Step 4: Prepare the documents and data needed by the RBI.
Step 5: Submit the application for an NBFC through the online application system.
Step 6: Answer any queries or clarifications from the regulators.
Step 7: Get the Certificate of Registration after approval from the RBI.
You cannot start regulated lending just because your small finance company registration is done. Registration with the RBI is another regulatory requirement where the RBI processes applications from entities that make such operating efforts based on the framework of NBFCs.
What are the Fees for Microfinance Company Registration?
The microfinance company registration fees involved will vary depending upon whether you engage the services of professionals to assist with your company’s registration, such as lawyers or accountants, incorporate your business and pay all relevant regulatory or government charges, which may differ.
Government charges are subject to variation; therefore, you must determine what this amounts to when you file.
Particulars | Fees |
|---|---|
Professional Fees | INR 2,499 onwards |
What is the Timeline for Microfinance Company Registration?
The completion of the financial services company registration is determined by various factors, including incorporation of the company, availability of required capital, preparation of the necessary documents, scrutiny by the regulatory authorities, and reply to any questions.
Why Choose Companyregister.co.in?
Companyregister.co.in provides valuable insights into the compliance costs and requirements in the registration process for your finance business.
Business Structure Guidance: Helps in selecting the best type of business structure
Document Preparation Assistance: Helps in the preparation of documents
Application Assistance: Guides in completing the application form
Regulatory Assistance: Helps in acquiring licenses from the RBI
Compliance Support: Assistance in understanding the compliance process
Overall Management: Responsible for helping the client throughout the registration process
It is also possible to set up a Private Limited Company in order to prepare the operational corporate structure for the finance company.