{"id":5467,"date":"2019-03-16T10:23:41","date_gmt":"2019-03-16T10:23:41","guid":{"rendered":"https:\/\/companyregistrationonline.in\/?p=5467"},"modified":"2020-10-07T10:49:36","modified_gmt":"2020-10-07T10:49:36","slug":"nidhi-company-vs-nbfc","status":"publish","type":"post","link":"https:\/\/companyregistrationonline.in\/blog\/nidhi-company-vs-nbfc\/","title":{"rendered":"Nidhi company vs NBFC vs. MF: what is the best business structure for you to start?"},"content":{"rendered":"
To choose the best business structure before you open a Finance Company, Nidhi company vs NBFC, MF, etc, let us first understand what is Nidhi Company, that exists only in the Indian community. The term Nidhi means \u2018treasure\u2019. And in the Indian Finance sector, it has come to represent a mutually beneficial company, incorporated to infuse the habit of saving money or using it carefully, among its members. Nidhi Company is registered as a Public Limited Company under The Company Act 2013<\/b>\u00a0and is governed by\u00a0Nidhi Rules 2014<\/b>. Under this structure, only the members can contribute towards the and only members can take a loan out of it. Members opting for a\u00a0Nidhi Company Registration<\/a>, have this aim as their sole objective.<\/p>\n The members of such society save and contribute to the funds of the company. This fund is then used to lend, at reasonable rates, to other members. The loans are usually taken for\u00a0construction\/repair of a house, or weddings in the family, etc.<\/p>\n All Monetary Business Companies in India are classified as Non-Banking Financial Companies (NBFC)<\/strong> or Banking Companies. Because Nidhi Company is incorporated, keeping in mind improvement in the culture of saving and lending money, they come under the ambit of NBFC.<\/p>\n A chit fund is one of the forms of savings exercised in India.<\/p>\n Just like Nidhi Company, a Chit Fund is also an arrangement where a group of people agrees to contribute money, into a fund. Only members\/shareholders make deposits or take loans, in each of these forms of NBFC.<\/p>\n However, that is where the similarity ends.<\/p>\n Chit finance schemes might also be unorganized schemes conducted among companions and relatives. There are some varieties of chits that are organized only to accomplish a particular reason. Chit support has played an important role in the financial development of people of a few states, for example, Kerala. providing easier credit.\u00a0 In Kerala, there exists a company, runs under the state govt., called Kerala State Financial Enterprise, with the Chit Funds scheme as its primary business activity.<\/p>\n And who can forget the infamous Saradha Scam of West Bengal, where the scheme was abused by its foremen.<\/p>\n The only similarity between a Nidhi Company and a Mutual Funds Company is that neither can work without people investing in them. Still, a lot of many people confuse over them, given the fact that the Nidhi Company can also be termed as a Mutually Benefit Society. Here are a few differences so you have a clear idea of your investment.<\/p>\n The purpose of MFIs, also, is to promote economic activity among low-income earners. Especially those, who rarely get access to the official banking services.<\/p>\n Their services are provided to those trapped in poverty, the unemployed or low-income individuals having low financial resources. Considering that they may attempt to save, borrow, take a loan, or even insurance. To also help cases where the very poor fall into the hands of loan sharks who charge an exorbitant interest rate. And then the borrower is never able to get out of the vicious circle.<\/p>\n<\/div>\n People can take small and reasonable business loans\u00a0safely, from an MFI. The lending practices followed are ethical and follow the laws.<\/p>\n Though both are registered under the\u00a0Companies Act 2013<\/strong>, they both are also regulated by\u00a0RBI.<\/strong><\/p>\n<\/div>\n However, there are differences<\/strong> in the working between a Nidhi Company and MFI, some of which are explained below:<\/p>\n To channelize your or family’s or knowns small savings, that is one of the many advantages of a Nidhi Company<\/a>. It is a skillful and effective style to give a direction to someone close. Encouraging them to save and be careful about spending their money.<\/p>\n Company registration online, we make speedy and efficient registration for a Nidhi Company to happen. Contact us at\u00a0+91 8750008585<\/span> or send your query on Email: contact@companyregistrationonline.in<\/a>. We also provide expert legal services for\u00a0Private Limited Company Registration<\/a>,\u00a0<\/span>LLP Registration<\/a>,\u00a0One Person Company Registration<\/a>,\u00a0or\u00a0Section 8 Company Registration<\/a>\u00a0anywhere in<\/span>\u00a0India.<\/p>\n Do go through:<\/p>\n What are Nidhi Companies ?<\/a><\/p>\nNidhi Company vs NBFC<\/h3>\n
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Nidhi Company vs Chit Fund<\/h3>\n
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Nidhi company vs Mutual Funds (MF)<\/h3>\n
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Nidhi Company vs Micro Finance Institutions (MFI)<\/h3>\n
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