24/03/2026
Microfinance Business is becoming one of the fastest growing financial sectors in India. Many entrepreneurs want to start a loan business through Microfinance Registration, but most people are confused about which structure is better — Section 8 Microfinance Registration or RBI Licence NBFC Registration.
In this video, we clearly explain the real difference between Section 8 Microfinance and RBI NBFC Microfinance. Many people believe that it is mandatory to obtain an RBI licence to start a Microfinance business. However, in reality, there are different legal structures through which Microfinance activities can be conducted in India.
Generally, Microfinance Business in India operates under two main models:
1. Section 8 Microfinance Model
2. RBI NBFC Microfinance Model
Both of these models have completely different legal structures, capital requirements, compliance rules, and operational frameworks.
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One important feature of Section 8 Microfinance is the Membership Based Lending Model. In this model, individuals become members of the organization before receiving financial assistance. Loans are usually provided only to registered members instead of the general public.
In Microfinance operations, two loan collection systems are commonly used:
Daily Collection Model
Weekly Collection Model
The Daily Collection system is widely used in small loan programs. In this system, borrowers repay their loan through small daily instalments. Daily Collection models help reduce default risk and ensure regular repayment.
The Weekly Collection system is another common Microfinance practice. In this system, borrowers repay their instalments once every week. Weekly Collection models are often used in group lending programs where borrowers form groups to ensure loan discipline and repayment.
Both Daily Collection and Weekly Collection systems are widely used in Microfinance institutions because they help maintain repayment discipline and reduce financial risk.
In this video we also explain the following topics in detail:
What is Microfinance Registration
How Section 8 Microfinance Registration works
What is RBI Licence NBFC Registration
How Daily Collection loan systems operate
How Weekly Collection loan models function
How Microfinance interest rates are calculated
How loan recovery systems work in Microfinance business
This video is extremely useful for anyone who wants to start a Microfinance Business, Loan Business, or Financial Services Company in India. Starting a loan business without understanding the correct legal structure can create serious legal complications in the future.
Guglymart Private Limited has been providing professional services related to Microfinance Registration, Section 8 Microfinance Registration, Financial Business Setup, and Loan Business Training for many years. We have helped many entrepreneurs successfully establish Microfinance businesses with proper legal structures and operational systems.
If you want to start a Microfinance Business, apply for Section 8 Microfinance Registration, or learn the complete system of Daily Collection and Weekly Collection loan models, you can contact Guglymart Private Limited.
Contact Details:
Guglymart Private Limited
Phone: 7557813545 / 7602980506
Website: www.guglymart.com
For more videos related to Microfinance Business, Loan Business Models, Daily Collection Loan Systems, Weekly Collection Programs, and Section 8 Microfinance Registration, subscribe to our YouTube channel and stay updated with our latest business guidance videos.
Thank you for watching.
