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Do you want to set up a financial institution for low-income groups? Get a Microfinance Company Registration with the help of experts like Enterslice for end-to-end services to Microfinance Company Formation. 467 microfinance companies registered since 2014.
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Are you an entrepreneur, a social enterprise, or an institutional investor looking to participate in this high-impact sector? Microfinance company registration online represents the foundational step. While the process is overwhelming from company incorporation and capital structuring through to RBI licensing, it demands precision, domain expertise, and a thorough understanding of the compliance landscape. At Enterslice, we will help you achieve a seamless process for obtaining a Microfinance Company License.
Microfinance company registration involves the legal process of setting up an entity to provide small, unsecured loans to low-income groups. In India, it is governed by the Companies Act, 2013, the RBI Act, 1934, and the RBI Master Directions for NBFC-MFIs. Moreover, obtaining an RBI license is mandatory to operate as an NBFC-MFI. Running a microfinance business without registration violates the RBI Act and can lead to penalties, prosecution, and shutdown orders.
Minimum Rs. 5 crore NOF
75% qualifying assets required
Experienced promoters/directors required
At least one director: 10+ years of financial services experience
Directors must clear the RBI’s fit and proper criteria
Robust IT systems, enterprise accounting and internal audit framework
Submit a 3–5-year business plan with the RBI
KYC and AML/CFT compliance
100% automatic-route FDI in NBFC-MFIs
Establish a legally compliant microfinance company and empower underserved communities with structured lending solutions. We assist with RBI microfinance loan company registration, regulatory compliance, and end-to-end setup, ensuring a smooth and hassle-free process.
The list of benefits of microfinance company registration is as follows:
Once established, a microfinance company can operate independently. Its business model allows it to sustain operations without heavy external dependency.
Raising funds for microfinance companies is generally easier. Investors and institutions are often willing to support this sector due to its growth potential.
Microfinance companies usually experience higher repayment rates. This is because they deal with small-ticket loans and maintain close borrower relationships.
These companies have better penetration in rural areas. They effectively provide financial services where traditional banks have limited presence.
Microfinance companies can avail various tax benefits. This helps in reducing the overall financial burden of the business.
Some microfinance structures do not require direct RBI approval. This is due to relatively lower compliance requirements compared to NBFCs.
Microfinance entities can charge higher interest rates. Typically, rates range between 20% to 25%, depending on the risk and borrower profile.
Starting a microfinance company encourages entrepreneurship. It enables promoters to build sustainable financial service businesses.
A Section 8 microfinance company is registered under the Companies Act, 2013. It enjoys a separate legal identity distinct from its members.
The list of documents for the Microfinance Company Registration Process is as follows:
Certificate of Incorporation
Memorandum & Articles of Association (MoA & AoA)
Company PAN Card
Board Resolution
Audited Financial Statements
Statutory Auditor’s Certificate
Business Plan
Director KYC Dossier
CIBIL / Credit Reports
Banker’s Certificate
Fair Practices Code (FPC)
IT & Systems Overview
Group Entity Disclosures
Policy Framework Bundle
Before starting the microfinance company formation process, promoters must carefully choose the legal structure, as each option affects capital requirements, scalability, funding access, and regulatory compliance.
It is governed by the Reserve Bank of India under the Master Direction for NBFCs. It requires a minimum capital of ₹5 crore (₹2 crore for North Eastern states). This is the most preferred structure for microfinance operations. It is eligible for FDI and institutional funding. It also allows nationwide lending operations across India.
It is governed by the Companies Act, 2013, under the Ministry of Corporate Affairs. It has no prescribed minimum capital requirement. It operates primarily on charitable or social welfare objectives. However, it has a limited ability to raise commercial investments. It is suitable for impact-driven and non-profit microfinance activities.
It is governed by the Societies Registration Act, 1860. It has no prescribed minimum capital requirement. It functions on a community-based and welfare-oriented model. It is best suited for localized microfinance programs. However, its operations are generally limited in scalability beyond regional areas.
It is governed by the Indian Trusts Act, 1882. It also has no prescribed minimum capital requirement. It is primarily established for philanthropic purposes. Its ability to undertake commercial expansion and fundraising is limited. It is commonly used in NGO-led microfinance initiatives.
It is governed by the respective State Cooperative Societies Act. The minimum capital requirement varies according to state-specific provisions. It is a member-driven financial structure focused on mutual benefit. Its operations are generally restricted within the registering state. It is mainly designed to serve the financial needs of its members rather than for profit maximization.
The step-by-step process to register a microfinance company in India is as follows:
Register a Private/Public Limited Company under the Companies Act, 2013, with NBFC-MFI objects; obtain COI, PAN, TAN, and GST.
Maintain a minimum Net Owned Fund (₹5 crore; ₹2 crore for NE region). Obtain Auditor’s Certificate and Bankers’ Certificate.
Prepare a 3–5-year business plan and board-approved policies (Fair Practices, KYC/AML, ALM, Grievance Redressal, etc.).
Appoint “fit and proper” directors and key officials like the Compliance Officer and the Principal Officer.
Submit NBFC-MFI application with all required documents, financials, and policy papers.
RBI conducts a detailed review of the application and may seek clarifications or conduct an on-site inspection of the company.
If satisfied, RBI issues in-principle approval subject to compliance conditions that must be met within a specified timeline.
The company must implement required systems, recruit staff, and operationalize policies as per RBI conditions.
Upon successful compliance, RBI issues the CoR, officially authorizing NBFC-MFI operations.
The company can begin microfinance activities under RBI regulations with continuous compliance and reporting obligations.
Partner with Enterslice for the best services in the industry.
The timeline for microfinance company registration is as follows:
Incorporate the company with the Ministry of Corporate Affairs and obtain the Certificate of Incorporation.
Infuse the required capital and obtain Net Owned Fund (NOF) certification from a Chartered Accountant.
Receive the approval and documents from the authority for Wyoming LLC formation.
Prepare a detailed business plan along with internal policies, compliance frameworks, and risk management documents.
Submit the NBFC-MFI license application through the RBI’s COSMOS portal with all required documents.
RBI examines the application, conducts background checks, and may raise queries for clarification.
Receive in-principle approval and fulfill all stipulated conditions, including infrastructure and compliance setup.
RBI grants the Certificate of Registration (CoR), allowing the company to commence microfinance operations.
The Reserve Bank of India mandates strict eligibility criteria to register as a microfinance company, as non-compliance may lead to rejection:
The list of post-Microfinance Company Registration compliances is as follows:
In order to obtain Microfinance Company Registration, you need to fulfil the following conditions:
Get your microfinance company license with 100% ease and comfort.
Enterslice brings over 15 years of experience in understanding India’s complex microfinance regulatory landscape. We have successfully assisted thousands of businesses in securing NBFC-MFI registration with a structured, compliance-driven approach. Below are the key reasons why businesses trust Enterslice:
As per the RBI, a minimum Net Owned Fund of Rs. 5 crore is required for standard NBFC-MFI registration. While a concessional threshold of Rs. 2 crore applies to entities committing to operate exclusively within India's North-Eastern states.
Microfinance company registration offers several key benefits, including operational self-sufficiency and easier access to funding due to strong investor interest. These companies often enjoy better repayment rates and strong rural outreach, helping serve underserved communities effectively. In certain cases, there is no strict minimum capital requirement or need for approval from the Reserve Bank of India. Additionally, they may avail tax benefits, charge flexible interest rates, and promote entrepreneurship. Structures like Section 8 companies also provide a separate legal identity under the Companies Act, 2013, enhancing credibility and trust.
The documents required for the microfinance company registration process include the Certificate of Incorporation, Memorandum and Articles of Association (MoA & AoA), Company PAN Card, and Board Resolution. Applicants must also submit audited financial statements, a statutory auditor’s certificate, a detailed business plan, and director KYC documents along with CIBIL/credit reports. Additionally, banker’s certificate, Fair Practices Code (FPC), IT and systems overview, disclosures of group entities, and a comprehensive policy framework bundle are required to complete the application.
Legal structures for microfinance company registration include several options with different compliance and operational features. An NBFC-MFI is RBI-regulated, requires ₹5 crore capital (₹2 crore in North East), and is preferred for nationwide operations and strong funding access. A Section 8 Company, Society, and Trust have no minimum capital requirement and are suitable for non-profit or welfare-based microfinance with limited commercial scalability. A Cooperative Society is state-regulated with variable capital requirements and generally operates at a local, member-driven level.
To register a microfinance company, the entity must first be incorporated as a Private or Public Limited Company under the Companies Act, 2013 and obtain basic registrations. After that, the required Net Owned Fund is infused, along with preparation of a business plan, policies, and appointment of qualified directors and key officials. The company then applies to the RBI through the COSMOS portal with all necessary documents. RBI reviews the application, may seek clarifications, and grants in-principle approval if satisfied. After fulfilling all conditions, the Certificate of Registration (CoR) is issued, allowing the company to begin NBFC-MFI operations under RBI regulations.
To register as a Microfinance Company, the RBI requires incorporation as a Private or Public Limited Company with an MoA authorizing microfinance/NBFC activities and a minimum Net Owned Fund of ₹5 crore (₹2 crore in North-East). At least 75% of assets must be microfinance loans to eligible low-income households, in compliance with RBI norms. Promoters and directors must meet “fit and proper” criteria, have relevant experience, no default history, and adequate industry expertise. The company must also maintain proper systems, a business plan, a compliance setup, and a grievance redressal mechanism.
Post-registration compliances for NBFC-MFIs include continuous RBI supervision and timely filing of returns such as NBS-7 (monthly), quarterly microfinance returns, NBS-9 (annual), ALM statements, and statutory audit reports. They must also comply with Companies Act requirements by filing MGT-7 and AOC-4, holding board meetings and AGMs, and maintaining statutory records. Tax filings like ITR-6, GST, and TDS/TCS returns are mandatory. Further, NBFC-MFIs must follow the Fair Practices Code, ensure transparent lending, report to credit bureaus, maintain grievance redressal systems, and comply with KYC, AML, and CFT norms.
Yes, foreign direct investment (FDI) is permitted in microfinance companies under the automatic route, subject to compliance with FEMA regulations, RBI's foreign investment guidelines, and applicable sectoral conditions.
Yes, a Section 8 company can engage in microfinance lending on a non-profit basis, but on the other hand, it cannot obtain NBFC-MFI registration from the RBI. For scalable, commercially oriented microfinance operations, the Microfinance Company registration structure is essential.
Yes, microfinance company registration can be done online. Such that the company is incorporated through the MCA portal, and the RBI application is submitted electronically via COSMOS. At Enterslice, we handle the entire process digitally from start to finish.
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Researchers have found out that organization using new technologies in their accounting and tax have better productivity as compared to those using the traditional methods. Complying with the recent technological trends in the accounting industry, Enterslice was formed to focus on the emerging start up companies and bring innovation in their traditional Chartered Accountants & Legal profession services, disrupt traditional Chartered Accountants practice mechanism & Lawyers.
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