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Micro Finance Company Registration (Section-8)

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Micro Finance Company Registration(Section-8)

The micro-finance industry is has been started by the Reserve Bank of India (RBI) along with Central Government. Micro-finance business really supports people with financial help where the formal banking system is not available. Small business owners don’t get the loan from the banks due to the complex process of Banks. To help them micro finance companies usually give loan less than Rs. 50,000. This small funding is known as Micro finance business The easiest way to register a Micro Finance Company in India is to register the Section-8 Company with the Ministry of Corporate Affairs (MCA). (Earlier section 8 company is also known as section 25 Company)


  • RBI approval not required.
  • No need of minimum capital of Rs. 2 Crores.
  • Minimum Compliances.
  • Can give unsecured loan to small business of Rs.50,000.
  • Can give loan for dwelling residence up to Rs.1.25 lakh.
  • Section 8 company have to follow the RBI guidelines on interest rate and processing charges.
  • It is a legal finance business and you can sue the defaulter in case of non payment of loan amount.

NO RBI Approval

In india, finance businesses are authorised only to Non-Banking Finance Companies (NBFC) and governed by RBI. NBFCs are required to get registration with RBI and comply with RBI guidelines. However, some business forms have been given exemption by the Reserve Bank of India (RBI) to do finance activities up to a certain extent.

The Reserve Bank of India through its master circular RBI/2015-16/15 DNBR (PD) CC.No.052/03.10.119/2015-16 Dated July 01 2015 has exempted all Section 8 Companies engaged in micro finance activities.

As per Para 2 (iii), Sections 45-IA, 45-IB and 45-IC of the Reserve Bank of India Act, 1934 (2 of 1934) shall not apply to any non-banking financial company which is engaged in below mentioned activities:

(a) Engaged in micro financing activities, providing credit not exceeding Rs. 50,000 for a business enterprise and Rs. 1,25,000 for meeting the cost of a dwelling unit to any poor person for enabling him to raise his level of income and standard of living; and.

(b) Licensed under Section 8 of the Companies Act, 2013; and.

(c) Not accepting public deposits as defined in paragraph 2(1) (xii) of Notification No. 118 /DG (SPT)-98 dated January 31, 1998..

Loan Limits

  • Borrower with a rural household annual income not exceeding Rs. 1,00,000 or urban and semi-urban household income not exceeding Rs. 1,60,000 will be eligible.
  • Loan amount will not exceed Rs. 60,000 in the first cycle and Rs. 1,00,000 in subsequent cycles.
  • Total indebtedness of the borrower will not exceed Rs. 1,00,000.
  • Tenure of the loan not to be less than 24 months for loan amount in excess of Rs. 30,000 with prepayment without penalty0.
  • Loan to be extended without collateral.
  • Aggregate amount of loans, given for income generation, is not less than 50 per cent of the total loans given by the mfis.
  • Loan is repayable on weekly, fortnightly or monthly installments at the choice of the borrower.


Government of India and the Reserve Bank of India have created conducive policy framework for Microfinance Institutions (MFIs) to provide necessary legitimacy and impetus to the sector. The following are the benefit of Micro Finance Business.

  • Provide access to funding
  • Encourage self-sufficiency and entrepreneurship
  • It offers a better overall loan repayment rate than traditional banking products.
  • Strengthen financial condition for some days till situation gets better.
  • Help in meeting credit needs for such a population range from emergency loans, consumption loans, business loan, working capital loan, housing etc.

Documents Required For Registration

Identity and Address Proof

Aadhar Card, Aadhar number is now a necessity for applying for any registration in India.

Income tax return can only be filed if the person has linked his PAN card with Aadhar number.

Address proof will be required for all directors and shareholders of the company to be incorporated.

For Indian nationals, PAN is mandatory. For foreign nationals, apostilled or notarised copy of passport must be mandatorily submitted.

Residence proof documents like bank statement or electricity bill should not be more than 2 months old.

All documents submitted must be valid

Registered Office Proof

  • Register office of all companies must be in India .If it is a Rented Property, Rent agreement and NOC from a landlord. If it is a Self-owned Property, Electricity bill or any other address proof.
  • Documents submitted must be valid and not more than 2 month old.



Form INC-32 must be accompanied by supporting documents including details of Directors & subscribers, affidavits, declarations, identity proof, address proof, MoA and AoA etc. Once the eForm is filed, its processed by the MCA’s Central Processing Centre.
If found complete company would be registered and CIN would be allocated. Also DINs gets issued to the proposed Directors who do not have a valid DIN. Maximum three Directors are allowed for using this integrated form for filing application of allotment of DIN while incorporating a company. Once all the 4 forms ready with the applicant, upload all three documents as Linked form on MCA website and make the payment of the same.

  • In respect of non-individual first subscribers who are based outside India, pdf attachments of apostilled MOA and AOA shall be attached with SPICe (INC-32).
  • SPICe AoA (INC-34) has facility for adding, modifying, and deleting Articles. Thus if additional article is required, we may add the same
  • DSC is mandatory for all subscribers and witnesses in eMoA (INC-33) and eAoA (INC-34). eMoA and eAoA shall be used only where the maximum number of subscribers do not exceed 7. In case the numbers of subscribers are more than 7, MoA and AoA shall be attached manually to SPICe and DSC is not mandatory in such cases.
  • Two resubmissions are only permitted in the e-form
  • SPICe eMoA and eAoA have to be uploaded as ‘Linked Forms’ to SPICe (INC-32).
  • The Ministry of Corporate Affairs (MCA) has notified an E-form known as AGILE – Application for Registration of the Goods and Services Tax Identification Number (GSTIN), Employees’ State Insurance Corporation (ESIC) registration and Employees Provident Fund Organization (EPFO) registration.
  • GSTIN Application via E-form AGILE and Mandatory to file INC-35 while submitting SPICe form.
  • It is mandatory to apply for PAN and TAN for the proposed company along with SPICe form.

Frequently Asked Questions

Microfinance, also known as microcredit, is a financial service that offers loans, savings and insurance to entrepreneurs and small business owners who don't have access to traditional sources of capital, like banks or investors.

Micro Finance Institutions, also known as MFIs, a microfinance institution is an organization that offers financial services to low income populations. Almost all give loans to their members, and many offer insurance, deposit and other services.


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