Information that I found on the web searching for a research project at my Business School. Since this was not so readily available even though its a commonly discussed topic, I thought it will be useful to share it in the format that I created.
1. A co-operative is entitled to take on savings accounts unlike an NBFC (Non Banking Financial Companies). The registrar of the companies is supposed to grant these licenses.
2. To get an NBFC license from RBI, the requirement is to have Rs 2 Crore (~ $450000) and the process takes 3-4 months. In case there are defunct companies, the license for them can be bought from RBI for a sum of Rs 25 Lakhs.
3. SIDBI (Small industries development bank of India) has initiated a “Transformation loan” in 2003,to enable the MFI’s to convert to a corporate entity. The loan provided is a quasi equity product with longer repayment period and can be converted into equity when the MFI decides to become a corporate entity.
References:
1. http://brandalyzer.wordpress.com/2010/01/24/starting-a-microfinance-business-in-india/
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