Microfinance Company Registration in India
NBFC-MFI Registration with RBI Approval

A microfinance company is a Non-Banking Financial Company - Microfinance Institution, or NBFC-MFI, that provides small-value, collateral-free microfinance loans to low-income households. Its purpose is financial inclusion: extending micro-credit to people and micro-enterprises that lack access to traditional banking, so they can fund livelihoods and small businesses. An NBFC-MFI is regulated by the Reserve Bank of India and operates as a genuine, structured lending business.

Because an NBFC-MFI is a regulated financial entity, the RBI sets clear eligibility conditions. The key requirements for microfinance company registration are:

• Company incorporation — the applicant must be a company registered under the Companies Act, with microfinance and lending as its main object.
• Net Owned Fund — a minimum Net Owned Fund (NOF), which for an NBFC-MFI has been ₹5 crore (₹2 crore for the North-Eastern region). The RBI has been progressively increasing the minimum NOF for NBFCs under its Scale Based Regulation, so the current applicable amount should be confirmed.
• Qualifying assets — microfinance loans must form a major part of total assets (generally at least 75% under the current framework).
• Microfinance loan criteria — loans must be collateral-free and made to households within the prescribed income limit.
• Fit and proper promoters — the directors and promoters must meet the RBI's fit-and-proper criteria.

Meeting these conditions, especially the net owned fund and the qualifying assets requirement, is essential before the RBI application is filed, and getting them right at the outset is where professional guidance matters most.

There are two main ways to do microfinance in India, and choosing the right one is an important early decision. The NBFC-MFI route is a commercial, for-profit microfinance company, registered with and regulated by the RBI, requiring a net owned fund and a Certificate of Registration. It is built to lend at scale and raise capital.

The other route is a Section 8 company, a non-profit company formed for charitable microfinance objectives. A Section 8 microfinance company can, within prescribed limits and conditions, carry out microfinance without RBI registration, which makes it simpler to start for smaller, non-profit work. The trade-off is scale and commercial flexibility: the NBFC-MFI is the right structure for a serious, growing microfinance lending business, while the Section 8 route suits mission-driven microfinance on a smaller scale. We help you weigh the two against your objectives before you commit.

The documents required for microfinance company registration generally include: the certificate of incorporation and the Memorandum and Articles of the company; KYC and credentials of the directors and shareholders; the net owned fund certificate from a Chartered Accountant; a detailed business plan and financial projections; bankers' reports; and board resolutions, along with the RBI's prescribed application form. Our team prepares and verifies the complete set so the NBFC-MFI application is filed correctly the first time.

Obtaining the Certificate of Registration is the beginning of an NBFC-MFI's regulated life, not the end. An NBFC-MFI carries ongoing compliance with the RBI, and staying compliant is essential to keep the registration in good standing. The main requirements include:

• RBI returns — periodic returns and reporting to the Reserve Bank of India.
• Qualifying assets — maintaining microfinance loans as the required proportion of total assets.
• Fair practices and pricing — following the RBI's microfinance conduct, pricing, and borrower-protection norms.
• Statutory audit and annual filings — audited accounts and filings under the Companies Act.
• Other RBI directions — adherence to the applicable directions for NBFC-MFIs.

We manage the full compliance calendar through our NBFC compliance support, and assist with the due diligence needed for funding and governance, so your microfinance company stays compliant as it grows.

NBFC-MFI registration is a specialised, RBI-driven process where the net owned fund, the qualifying assets condition, the documentation, and the business plan must all be right — and the RBI's scrutiny is exacting. That is exactly where experienced professional support pays off.

Clients choose us because we provide complete, reliable support for microfinance company registration: company incorporation, net owned fund structuring, documentation and business plan preparation, the RBI application and Certificate of Registration, and ongoing compliance. As Chartered Accountants, we also handle the digital signatures and business setup steps, and advise on whether an NBFC-MFI or a Section 8 microfinance company suits you best. We help promoters build a compliant, credible microfinance company with confidence.