Microfinance companies, as the name implies, are financial entities that give loans to low-income people who have fewer financial needs than other people in society. Traditional financial institutions, such as banks and other financial institutions are often unavailable to these areas.
Microfinance company registration has grown in popularity in recent years and is now widely regarded as an efficient poverty-relieving solution. The majorities of MFIs are well-run and have a good track record, while others are self-sufficient.
In India, there are two types of microfinance companies: one that must be registered with the RBI and the other that that is a non-profit that is registered as a section 8 company and does not require RBI clearance.
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