The Indian microfinance sector witnessed rapid growth over last decade. A microfinance institution acquires permission to lend through registration. Each legal structure has different formation requirements & privileges. Microfinance institutions in India are registered as one of the following entities: 1. Non Government Organizations engaged in microfinance ( NGO-MFIs) comprised of societies and trust 2. Cooperatives registered under the conventional State-Level Cooperative Acts or Multi-State Co-operative Societies Act 2002 3. Section 25 Companies ( Not for Profit) 4. For Profit- Non banking Finance Companies (NBFCs) NGO- MFIs, Cooperatives and Section 25 Companies Microfinance institutions operating as a non-profit company operate as either an NGO-MFI, Co-operatives or Section 25 Company. Each is structured slightly differently in terms of ability to accept equity investments and dividends. ...
