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Micro Financing by Registered societies or trusts



As I have studied registered societies and trusts can do micro financing legally and they do not need to take any separate money lenders license also.

Is it right?

Can these institutions borrow money from public for micro -financing?

Can they accept donations for micro financing,Can they use donation money for micro financing? 

From where they will get the funds to do micro-financing ?


Please help,thanks in advance.

 5 Replies

Gundlapallis (Advocate)     12 April 2010

Non-profit Societies can authorise themselves to borrow and undertake micro financing through thier bye-laws.  They undertake this activity from the funds they raise from the public and they receive from organisations like - Rastriya Mahila Kosh, National Minorities development corporation, World women banking etc etc.


For other than a Non-profit societies they have to obtain RBI permission.

1 Like

bhagwat patil (Property due diligence 9422773303)     12 April 2010

for lending and charging the interest  they have to take licence from RBI under BRA

1 Like


Gundlapallis,In which form the funds can be raised from Public ?--I mean, donations or loans or both ?And can you give me some online link fo rthe confirmation of the same information aslo.

Gundlapallis (Advocate)     13 April 2010

If the bye-laws authorise the funds can be in form of donations or loans or in what ever manner in case of registered non-profit societies.  Read Registration of societies Act.  Go to your nearest office of Registrar of Assurances and get certified copies of bye-laws, audit reports and annual reports of a well established NGO in your area and study them, you will learn lot of things. 

2 Like

Dr. L.N. Lion (CMD)     22 April 2010

Thanks Mr. Gundlapallis.

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