Home/ Business Registration/ Micro Finance Company Registration

Start a Regulated Microfinance Lending Business

A Microfinance Company can provide small, collateral-free loans to eligible low-income households, subject to the applicable regulatory framework.

When the business is intended to operate as a regulated NBFC-MFI, it must satisfy the RBI's requirements — including at least 75% of total assets deployed towards microfinance loans and a current Net Owned Fund of ₹10 crore.

Low-Income Households

Collateral-Free Loans

₹10 Cr NOF (NBFC-MFI)

Customer Protection

RBI CoR Process

Expert Assistance

Talk to an Expert

RBI-Regulated NBFC-MFI Framework Borrower-First Approach 100% Data Privacy

Need Help With Microfinance Registration?

Share your business details and our expert will review NBFC-MFI eligibility, NOF planning and the registration process.

Full Name

Mobile Number

Email Address

Target Borrower Segment

Expected Capital / NOF Available

State / Location

Proposed Company Name

Your information is secure and confidential.

Overview

Microfinance Is Not Just "Small Loan"

A loan does not become compliant microfinance merely because the amount is small. Under RBI's current framework, a microfinance loan is a collateral-free loan to a household with annual income up to ₹3 lakh, subject to the applicable household repayment-obligation limit and other regulatory requirements — regardless of whether it is processed physically or digitally.

What is an NBFC-MFI

A specialised non-deposit-taking NBFC whose principal business is microfinance lending — at least 75% of total assets must be deployed towards microfinance loans.

₹10 Crore Net Owned Fund

The current NOF requirement for NBFC-MFI is ₹10 crore — not ₹2 lakh or ₹5 lakh as sometimes claimed. NOF is a regulatory measure, not simply a bank balance.

Beyond Just Loan Size

The company must follow rules on borrower income, household indebtedness, repayment obligations, pricing, disclosures, KYC, recovery and grievance handling.

NBFC-MFIRBI-Regulated Microfinance

What We Help You With

A complete NBFC-MFI registration process, end to end, subject to the applicable RBI framework.

Business Model Assessment

Borrower segment, loan size, geography and funding model reviewed upfront.

NBFC-MFI Structure

Checking whether the proposed business can realistically satisfy the 75% asset test.

Capital / NOF Planning

Planning for the current ₹10 crore Net Owned Fund requirement and its source.

NBFC-MFI

Regulated
Microfinance

RBI Application

Business plan, financial projections and supporting information prepared for RBI.

Regulatory Setup

Credit policy, pricing policy, KYC/AML and customer-protection framework.

Ongoing Compliance

RBI regulations, prudential requirements and continuing reporting after the CoR.

Not Just a Small Loan

Key Regulatory Conditions of a Microfinance Loan

The RBI definition rests on these conditions — not simply the amount lent.

Rule	Requirement
Household income	Up to ₹3 lakh annual household income
Collateral	Loan must be collateral-free — a lien over a deposit account does not satisfy this
Repayment cap	Household's total monthly loan obligations capped at 50% of monthly household income
Prepayment	No prepayment penalty on microfinance loans
Delayed-payment penalty	Applied only to the overdue amount, not the entire loan
Pricing	Board-approved pricing policy; rates must not be usurious
Disclosure	Key Facts Statement (KFS) with APR and amortisation schedule required
NBFC-MFI NOF	Current requirement of ₹10 crore

A microfinance loan is not defined merely by a small amount — household income, collateral-free status and the repayment-obligation limit are what matter under RBI's current framework.

Clear Expectations

What Microfinance Registration Does Not Guarantee

NBFC-MFI registration provides regulatory authorisation for the microfinance business — it is not a guarantee of funding, recovery, or business outcomes.

Government subsidy or funding

Bank loan or investor funding

Customer acquisition or profit

Recovery of every loan

Guaranteed interest income

Permission to accept unlimited deposits

Borrower Journey

How a Real Microfinance Loan Process Works

From application to disbursement — responsibly assessed at every step.

Application & KYC

Borrower applies; identity and required documents are verified.

Household Income Assessment

Assessed under a Board-approved methodology, not an arbitrary entry.

Credit Information Check

Existing borrowing and household indebtedness checked via CIC data.

Repayment Capacity & KFS

Total obligations checked against the 50% limit; KFS and APR disclosed.

Disbursement

Loan disbursed through the permitted physical or digital process.

Repayment & Support

Borrower repays as agreed; complaints handled through the grievance mechanism.

The Registration Process

How Micro Finance Company Registration Works

From business-model assessment to a fully licensed, compliant NBFC-MFI.

Business Model & Eligibility

Assess borrowers, loan size and confirm the business can satisfy the 75% asset test for NBFC-MFI.

Capital & Company Structure

Plan the ₹10 crore NOF, review promoters/directors and structure the company.

Policies & Customer Protection

Prepare the credit, pricing, KYC/AML, Fair Practices Code and grievance framework.

RBI Application & CoR

Submit the application, respond to RBI queries, and commence business on receiving the CoR.

Documents & Information

What You Should Keep Ready

Promoter/director, company, financial and business documents — including the borrower-protection policies specific to microfinance lending.

PAN & Identity Proof

Certificate of Incorporation, MOA & AOA

NOF Calculation & Capital Details

Audited Financial Statements

Credit & Pricing Policy

Fair Practices Code & Grievance Policy

Promoters must be able to demonstrate the legitimate source of capital through the banking channel. RBI may examine the source and genuineness of funds before granting the NBFC-MFI Certificate of Registration.

Clear Distinction

NBFC-MFI vs General NBFC vs Private Limited Company

NBFC-MFI is a specialised category — not simply a private company giving small loans.

Feature	NBFC-MFI	General NBFC	Private Limited Company
Focus	Microfinance lending to low-income households	Depends on category	General corporate business
Asset condition	At least 75% assets in microfinance loans	Category-specific	Not applicable
Current NOF	₹10 crore	Depends on category	No NBFC NOF requirement
Deposit-taking	Non-deposit-taking	Category-specific	Not applicable
RBI CoR	Required	Required	Not applicable without NBFC business
Borrower rules	Microfinance-specific (income, collateral-free, 50% cap)	Applicable category-specific rules	Cannot conduct regulated NBFC lending

A company cannot avoid RBI requirements by calling its activity "small loans" — if the business falls within the regulated NBFC framework, the applicable registration must be followed. Certain not-for-profit Section 8 entities may fall under separate conditions, examined case by case.

What You Receive

After Successful Microfinance Company Registration

The exact deliverables depend on the engagement and the proposed business model.

Certificate of Incorporation, MOA & AOA NBFC-MFI Certificate of Registration Business Plan & Regulatory Policies Customer Compliance Framework

Registration is only the beginning — pricing, KFS disclosures, recovery practices, grievance handling and RBI reporting continue to apply after the CoR is granted.

FAQs

Frequently Asked Questions

Clear answers before you register your Micro Finance Company.

A non-deposit-taking NBFC with at least 75% of total assets deployed towards microfinance loans, regulated under RBI's applicable microfinance framework.

₹10 crore. Claims that an NBFC-MFI can be started with ₹2 lakh or ₹5 lakh are not accurate for the current RBI framework.

A collateral-free loan to a household with annual income up to ₹3 lakh, subject to the applicable household repayment-obligation limit and other regulatory conditions.

No. A loan meeting RBI's definition of microfinance loan must be collateral-free, and taking a lien over a deposit account does not change that.

Potentially, but the household's total monthly repayment obligations across all loans must stay within the applicable 50% limit of monthly household income.

Yes. RBI's definition covers loans applied for, processed or disbursed through physical or digital channels, subject to the applicable digital-lending requirements.

No. NBFC-MFI is a non-deposit-taking NBFC under the current category definition.

No. RBI's microfinance directions state no prepayment penalty should be charged, and any delayed-payment penalty must apply only to the overdue amount.

Not automatically. Incorporation and RBI NBFC-MFI registration are separate, and the applicable regulatory framework must be followed if the activity falls within regulated NBFC business.

Ready to Register Your Microfinance Company?

Build a compliant lending business for underserved borrowers.

Business Model → NBFC-MFI Eligibility → ₹10 Crore NOF Planning → Company Structure → Business Plan → Policies & Risk Framework → RBI Application → RBI Review → NBFC-MFI CoR → Ongoing Compliance

Start Microfinance Company Registration