Nidhi Companies are not allowed to do a Micro Finance business in India. Micro Finance credit is a type of business which has been specifically assigned to Non Banking Financial Companies (NBFC) with a minimum net owned fund of Rs.5 crore.
Small businesses and house woman don’t get the loan from the banks due to lack of proper facilities and documentation. To help them in the funding, various people often fund these business and house women in small amount, usually less than Rs.50,000. This
Micro Finance Company is a type of Non Banking Financial Company (NBFC) which is in business of micro (small) credit to a special type of borrowers. It is also known as Micro Finance Institution (MFI).