Section 8 Microfinance Company Registration Process: A Simple, Real-World Guide

If you’re thinking of starting a microfinance company, chances are your intention is not just profit—it’s impact.

You want to:

• Support small borrowers
• Help self-help groups, women entrepreneurs, or rural businesses
• Provide affordable credit where banks don’t reach

And that’s exactly why many founders explore the Section 8 microfinance company registration process.

But here’s the honest truth.

Most people get confused very early because:

• Section 8 companies are not normal companies
• Microfinance is also regulated by RBI
• And the process mixes company law and financial regulation

First Things First: What Is a Section 8 Microfinance Company?

Before jumping into the Section 8 microfinance company registration process, let’s clear the basics.

A Section 8 Microfinance Company is:

• A non-profit company registered under Section 8 of the Companies Act, 2013
• Formed for social objectives, not profit distribution
• Allowed to provide microfinance-related services

The key point is this:

Any surplus earned is reinvested into the mission—not distributed as dividends.

That’s what differentiates it from NBFC-MFIs or private finance companies.

Why Choose Section 8 for a Microfinance Company?

People often ask:

“Why not just register a normal NBFC?”

Here’s why founders choose Section 8:

• Focus on financial inclusion, not shareholder profit
• Easier access to grants, CSR funds, and donations
• Better trust among beneficiaries and NGOs
• Strong social credibility

That’s why the Section 8 microfinance company registration process is popular among NGOs and impact-driven founders.

Can a Section 8 Company Do Microfinance?

Yes—but with conditions.

A Section 8 company:

• Can provide micro-loans
• Can work with SHGs, JLGs, or low-income borrowers
• Must follow latest RBI guidelines for section 8 microfinance company (where applicable)
• Cannot behave like a commercial lender

The emphasis must always remain on social purpose over profit.

Requirements for Section 8 Microfinance Company Registration

Let’s talk eligibility before the process.

Basic Requirements

To start the Section 8 microfinance company registration process, you need:

• Minimum 2 directors (for a private Section 8 company)
• At least 2 members/subscribers
• One director must be an Indian resident
• Clear charitable and microfinance objective

There is no minimum capital requirement, which is a big advantage.

Objects Clause: The Heart of the Application

This is where most applications get rejected.

Your MoA (Memorandum of Association) must clearly mention:

• Microfinance
• Financial inclusion
• Support to economically weaker sections
• Livelihood development

The MCA closely examines whether your objectives justify a Section 8 license.

This is why drafting the MoA/AoA is the most critical step in the Section 8 microfinance company registration process.

Step-by-Step Section 8 Microfinance Company Registration Process

Now let’s break the process into simple, logical steps.

Step 1: Obtain DSC and DIN

The first step in the Section 8 microfinance company registration process is compliance readiness.

You must obtain:

• DSC (Digital Signature Certificate) for directors
• DIN (Director Identification Number)

Without these, no MCA filing can happen.

Step 2: Name Approval (SPICe Part A)

Next comes name approval through:

• SPICe Part A on the MCA portal

The name must:

• Reflect the nonprofit nature
• Avoid words suggesting profit or commercial lending
• Include words like "foundation," "society," "association," etc.

For microfinance, the name should subtly indicate:

• Financial inclusion
• Social lending
• Development focus

This step is crucial in the Section 8 microfinance company registration process.

Step 3: Drafting MoA and AoA (Very Important)

Now comes the backbone of your company.

You must draft:

• MoA with clear microfinance and charitable objects
• AoA defining governance, restrictions, and non-profit rules

The drafting must emphasize:

• No dividend distribution
• Income used only for objectives
• Social purpose over profit

If this step is weak, MCA may reject the Section 8 license.

Step 4: Filing SPICe Part B and AGILE-PRO

Once documents are ready, you file:

• SPICe Part B (incorporation form)
• AGILE-PRO (GST, EPFO, ESIC, bank account, etc.)

This step officially submits your Section 8 microfinance company registration process to MCA.

Step 5: Section 8 License Application

Unlike normal companies, Section 8 companies require special approval.

MCA reviews:

• Objects
• Declarations by directors
• Financial projections
• Intent and credibility

If satisfied, MCA grants the Section 8 license.

Step 6: Certificate of Incorporation (COI)

After approval:

• MCA issues Certificate of Incorporation (COI)
• Your Section 8 microfinance company legally comes into existence

At this point, your Section 8 microfinance company registration process is complete.

Registration Fees and Costs (Practical Clarity)

People often search:

• section 8 microfinance company registration fees

Here’s the realistic answer.

Government Fees

• Section 8 companies enjoy reduced MCA fees
• Stamp duty depends on the state.

Professional Fees

• Drafting MoA/AoA
• Handling MCA objections
• End-to-end compliance

Costs vary based on complexity and advisory support.

RBI Guidelines: An Important Reality Check

Many founders assume:

“Section 8 hai, RBI ka issue nahi hoga.”

That’s not entirely true.

While Section 8 companies are not NBFCs:

• Lending activities may still attract RBI oversight
• Especially if loans resemble commercial microfinance

Always stay aligned with the latest RBI guidelines for Section 8 microfinance companies to avoid regulatory trouble.

Section 8 Microfinance Company Rules You Must Follow

Once registered, you must follow strict rules:

• No dividend to members
• Income used only for stated objectives
• Annual compliance with MCA
• Transparent accounting
• No profit-driven lending practices

These Section 8 microfinance company rules ensure the social nature remains intact.

Can You Buy or Sell a Section 8 Microfinance Company?

You may see searches like

• section 8 microfinance company for sale

Legally speaking:

• Section 8 companies cannot be sold like assets
• Transfer of control is highly restricted
• MCA approval is mandatory for structural changes

Any “ready-made” Section 8 company must be evaluated carefully.

Section 8 Microfinance Company List in India

There is no single public database titled

• section 8 microfinance company list pdf

However:

• MCA portal records all Section 8 companies
• Activity classification helps identify microfinance-focused entities

Always verify status before collaboration.

Section 8 vs Small Finance Company Registration

Many people confuse:

• section 8 Microfinance Company Registration Process
• with small finance company registration

They are completely different.

Section 8 Microfinance	Small Finance Company
Non-profit	For-profit
MCA regulated	RBI regulated
No minimum capital	Very high capital
Social lending	Commercial banking

Choose based on your intent, not just opportunity.

Common Mistakes to Avoid

From real experience, avoid these:

• Weak or vague microfinance objectives
• Copy-paste MoA/AoA
• Ignoring RBI angle
• Treating Section 8 like a normal company
• Assuming profits can be distributed

These mistakes can derail your Section 8 microfinance company registration process.

Final Thoughts (From Real Experience)

Starting a Section 8 microfinance company is not just a legal process—it’s a commitment.

A commitment to:

• Financial inclusion
• Ethical lending
• Long-term social impact

The Section 8 microfinance company registration process is detailed because the law wants to ensure your intent is genuine.

If done correctly, it gives you:

• Credibility
• Trust
• A strong platform to create real change

If you’re serious about registering a Section 8 microfinance company and want the process handled smoothly—from drafting to MCA approval—professional guidance saves time, cost, and future compliance stress.

For expert support on Section 8 company registration, microfinance structuring, and end-to-end compliance, visit callmyca.com.