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Hisho & Kanri
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Microfinance Company Registration

Build a RBI-compliant microfinance institution from day one.

Microfinance Company Registration is the process of incorporating and licensing an entity — most commonly an NBFC-MFI or a Section 8 microfinance company — to legally extend small-ticket, collateral-free credit to low-income households, Joint Liability Groups (JLGs), and Self-Help Groups (SHGs). It's the difference between running an informal lending operation and holding a Certificate of Registration that banks, credit bureaus, and the Reserve Bank of India recognise.

Done right, it unlocks bulk refinance from SIDBI and NABARD, priority-sector lending status, and investor confidence. Done without expert guidance, it usually means a rejected COR application, a Net Owned Fund structured incorrectly, or months lost to RBI queries — which is exactly why serious promoters bring in a microfinance registration specialist rather than filing solo.

Talk to a Microfinance Registration Expert Compare MFI Structures
0Microfinance Entities Registered
0Structures Advised On
0Avg. RBI Approval Timeline
0First-Attempt Approval Rate
Reserve Bank of India
Certificate of Registration
Issued under Section 45-IA, RBI Act 1934 to commence microfinance / NBFC business
Entity TypeNBFC-MFI
CategoryNon-Deposit Taking
Net Owned Fund₹10 Cr+
Filed ByHisho & Kanri
Structures

Which legal structure fits your microfinance model?

Each route trades off differently on capital requirements, regulatory oversight, and how much scale you can eventually reach. Here's the full lineup we help promoters register.

NBFC-MFI (Non-Deposit Taking)

The RBI-regulated structure for scaled microlending, requiring a minimum Net Owned Fund of ₹10 crore (₹5 crore for North-Eastern states) and at least 85% qualifying microfinance assets.

Most Popular

Section 8 Microfinance Company

A not-for-profit route for microlending funded through grants, CSR, and donor capital — well suited to promoters prioritising social impact over investor returns.

Microfinance Trust

Registered under the Indian Trusts Act — commonly used by NGOs transitioning from informal community lending into a more formal, auditable structure.

Mutual Benefit / Credit Cooperative

A member-owned thrift and credit society model that lends exclusively to its own members, regulated under state cooperative societies legislation.

Business Correspondent (BC) Model

Partner with a bank or larger NBFC to originate and service microloans on their books — a lighter-touch entry point that doesn't require an independent COR.

Small Finance Bank Pathway

A graduation route for established NBFC-MFIs with a strong track record looking to eventually accept deposits under a Small Finance Bank licence.

State-Registered Money Lender

A smaller-scale, regionally licensed structure under the relevant State Money Lending Act, suited to single-district lending operations.

Nidhi-Linked Lending Vehicle

A mutual-benefit entity that channels small loans exclusively to its enrolled members, regulated as a non-banking financial structure.

Ecosystem

From regulator to borrower: the microfinance distribution chain

A registered microfinance company doesn't operate in isolation — it sits inside a regulatory hierarchy that flows all the way down to the individual borrower. Here's how that chain is structured.

Reserve Bank of India / Registrar of Companies

Regulator & registering authority issuing the Certificate of Registration

Your Registered NBFC-MFI

Head-office entity holding the COR and Net Owned Fund

Regional Branch Offices

Local presence across districts and states

Credit & Risk Team

Underwriting, asset classification, provisioning

Field Operations Team

Group formation, collections, borrower training

Joint Liability Groups

4–10 borrowers with mutual repayment guarantee

Self-Help Groups

Community savings-and-credit collectives

Individual Micro-Borrowers

End recipients of collateral-free credit

The Process

From incorporation to RBI's Certificate of Registration, in eight steps

Here's exactly what happens between deciding to build a microfinance business and holding a Certificate of Registration for your NBFC-MFI in hand.

1

Choose the Right Structure

We assess your funding plans, target borrower segment, and social objectives to decide between an NBFC-MFI, Section 8 microfinance company, or trust model.

2

Company Incorporation

We incorporate your private limited or Section 8 company with the MCA, drafting an object clause specific to microfinance and NBFC lending activity.

3

Capital Infusion & NOF Certification

Promoters bring in the minimum Net Owned Fund, which is then certified by a practising Chartered Accountant ahead of filing.

4

Director & Promoter Due Diligence

We run RBI's fit-and-proper checks — credit history, prior defaults, and background verification — on every proposed director and promoter.

5

Business Plan & Policy Drafting

A five-year business plan, credit policy, Fair Practices Code, and grievance redressal policy are prepared to accompany your application.

6

RBI Certificate of Registration Application

The complete application, along with every annexure RBI requires, is filed through the COSMOS portal on your behalf.

7

RBI Scrutiny & Certificate Issuance

We manage any clarifications RBI raises during scrutiny until the Certificate of Registration is issued in your company's name.

8

Operational Go-Live

Credit bureau membership, loan management system setup, and staff training are completed ahead of your first JLG or SHG disbursement.

How It Works

How microfinance lending operates once you're registered

Registration is the starting point — this is the repeating cycle a licensed microfinance company runs, month after month, borrower group after borrower group.

Lending Cycle NBFC-MFI Operations
Group Formation JLG / SHG onboarding
Credit Assessment Household income check
Loan Disbursement Funds released to group
Collection Weekly / monthly cadence
Bureau Reporting Repayment data filed
Portfolio Reinvestment Book grows, cycle repeats
Eligibility

Who can register a microfinance company?

Requirements vary slightly by structure, but every NBFC-MFI applicant is measured against the same core RBI criteria.

Minimum Net Owned Fund

₹10 crore Net Owned Fund (₹5 crore for North-Eastern states), certified by a practising Chartered Accountant.

Fit & Proper Directors

Promoters and directors with a clean credit history, no loan defaults, and no prior regulatory action against them.

85% Qualifying Assets Test

At least 85% of net assets must qualify as microfinance loans as defined under RBI's Master Directions.

Prior Incorporation Under Companies Act

The applicant must already be an Indian-registered company (or Section 8 company) before filing for a Certificate of Registration.

Household Income Cap Compliance

Lending must target the low-income household segment as defined under RBI's microfinance regulations.

No Prior Regulatory Default

Promoters must not have defaulted with any bank or financial institution or been declared a wilful defaulter.

Paperwork

Documents you'll need for your RBI application

Gathering these upfront is the single biggest thing you can do to speed up your Certificate of Registration.

Certificate of Incorporation

Issued by the Registrar of Companies

MOA & AOA

With a microfinance / NBFC object clause

Net Worth / NOF Certificate

CA-certified capital structure

Director KYC Documents

PAN, Aadhaar & DIN of directors

Five-Year Business Plan

Projected financials & portfolio growth

Board Resolution

Approving the COR application

Bankers' Report

Confirming no lien on promoter funds

Fair Practices Code

Board-approved draft policy

Why It's Worth It

What a Certificate of Registration actually buys you

Beyond regulatory formality, an RBI-recognised microfinance company changes what your business can access — and how much lenders and investors trust it.

Priority Sector Lending Tag

Your loans qualify as PSL for partner banks, easing refinance access

Access to Bulk Refinance

Eligibility for SIDBI, NABARD, and MUDRA refinance lines

Co-Lending & Securitisation

Partner with banks to co-lend or sell down loan portfolios

Regulatory Credibility

RBI-registered status builds trust with lenders and investors

Structured Risk Management

Mandated provisioning protects your book from concentration risk

Tax & Fiscal Benefits

Deductions available to regulated lending entities

Scalable Branch Network

Your licence supports pan-India branch expansion

Path to Small Finance Bank

A strong track record can support a future SFB upgrade

After Registration

Staying compliant, year after year

Registration is the start, not the finish — here's what keeps your NBFC-MFI in good standing with RBI afterward.

NBS Returns to RBI

Periodic NBS-1, NBS-2, and NBS-9 returns filed on portfolio quality and Net Owned Fund.

Asset Classification & Provisioning

NPA norms and provisioning maintained as prescribed under RBI's microfinance directions.

Fair Practices Code Adherence

Transparent pricing disclosures and a no-coercion collection policy in force at all times.

Credit Bureau Reporting

Monthly borrower-level data submitted to credit information companies.

Interest Rate & Margin Cap

Pricing kept within RBI's prescribed margin cap over the cost of funds.

Statutory & Concurrent Audit

Annual statutory audit plus periodic internal or concurrent audit of the loan book.

Why Hisho & Kanri

Microfinance registration handled by specialists, not generalists

We've guided promoters through RBI's NBFC-MFI registration process across India and know exactly where Certificate of Registration applications usually stall — and how to avoid it.

Microfinance-Focused Experts

Specialists in RBI's NBFC-MFI directions, not general company filers.

Faster COR Turnaround

Applications built to withstand RBI's first round of scrutiny.

End-to-End Documentation

Business plan, credit policy, and Fair Practices Code drafted for you.

Transparent Process

You see every filing and status update, not just a final certificate.

Post-Licence Compliance Support

NBS filings and audits managed long after registration is done.

Confidential Handling

Your identity and company documents handled under strict confidentiality.

FAQ

Common questions about microfinance company registration

Can't find your question here? Use the form alongside this page and we'll answer it directly.

It's the legal process of incorporating and licensing an entity — typically an NBFC-MFI or Section 8 company — to extend small, collateral-free loans to low-income borrowers under RBI's regulatory framework.

An NBFC-MFI is a for-profit, RBI-registered lender with a Net Owned Fund requirement, while a Section 8 company is a not-for-profit vehicle typically funded through grants and CSR rather than equity investors.

At least two directors are required, and RBI additionally expects the board to include members with relevant financial or microfinance sector experience.

Typically around 90 working days once a complete application is filed, though it can vary depending on RBI's queries and how quickly they're resolved.

₹10 crore, or ₹5 crore for entities registered in North-Eastern states, certified by a practising Chartered Accountant.

Certificate of Incorporation, MOA/AOA, Net Worth Certificate, director KYC, a five-year business plan, and a board resolution are the core set — see the Documents section above for the full list.

Yes, subject to FDI norms applicable to NBFCs and additional RBI due diligence on foreign promoters and their source of funds.

Core lending income is generally exempt, but GST registration may still apply to processing fees or other taxable services — we can confirm your specific case.

NBS returns, asset classification, Fair Practices Code adherence, credit bureau reporting, and statutory audits — see the Compliance section above.

Yes, many NBFC-MFIs began as NGOs or societies running microcredit programmes before transitioning to a formal company structure to raise equity and scale.

Because we specialise in RBI's NBFC-MFI framework specifically, keep you informed at every filing stage, and stay on for compliance long after your Certificate of Registration is issued.