Microfinance Company (MFI)
Register a Microfinance Institution (MFI) to provide collateral-free small loans to low-income and rural borrowers.
Key Benefits
Eligibility & Requirements
- For Section 8 MFI: Non-profit company under Companies Act
- For NBFC-MFI: NOF ≥ ₹10 crore, RBI registration mandatory
- 85% of net assets must be qualifying micro loans
- Loans to borrowers with household income ≤ ₹3 lakh (rural/semi-urban)
- Maximum individual loan: ₹3 lakh
Documents Required
Frequently Asked Questions
What is the difference between NBFC-MFI and Section 8 MFI?
NBFC-MFI is for-profit, requires ₹10 crore NOF, and is regulated by RBI. It can raise commercial borrowings. Section 8 MFI is non-profit, has lower capital requirements, but cannot raise deposits and must reinvest surpluses.
Can an MFI charge any interest rate?
No. RBI caps NBFC-MFI lending rates. Pricing must be cost of funds + margin (max 10% for large MFIs, 12% for smaller ones). All fees must be disclosed upfront to borrowers.
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