Tuesday, 12 June 2018

Micro Finance Company Registration


Non-Banking Financial Company-Micro Finance Institution (NBFC-MFI) is a secondary banking system aimed at extending credit to economically disadvantaged groups.

These provide small-scale retailers, having limited resources, with an opportunity to avail finance and thereby increase their efficiency and profitability.

According to Reserve bank of India, NBFC-MFI is a non-deposit taking NBFC which has not less than 85% of its assets satisfying the criteria set by the RBI.

The Micro Finance Company Registration is similar to other NBFCs registration with respect to forms and documents, except for few differences on account of capital requirement and additional information.


What is the additional information required for registration as NBFC-MFI?

In addition to the registration process followed for NBFC in general, following information has to be supplied specifically for the registration of NBFC- MFI under the signature of the director and seal of the company:


1.      Whether the company has been making transactions in any other form as the business of Micro Financial Institution on or before December 2, 2011?
2.           If yes, the date of commencement of such business.
3.           Details of the Self Regulatory Organization (SRO) with which the company is associated (Name, Registered Address, etc)
4.           Are there any other NBFC-MFIs/ pending NBFC-MFIs in the group? If yes, then justification of the same?
5.           The Projected business plan for 3 years indicating the following:
a.            Amount of loan assets to be originated
b.            Amount of loan assets to be extended for income generation
c.            Break up of amount of assets to be originated in rural areas and semi-urban and urban areas
d.           Activities the company intends to support in rural, semi-urban areas, and urban areas
e.            Projected profits
f.             Average cost of borrowings
g.           Average Return on Assets(ROA)
h.           Expected capital expenditure in land and buildings and
i.             IT resources
j.             Locations where the company intends to operate
k.            Allocation of resources to training and skill
l.             development of SHGs/JLGs

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