Section 8 Microfinance Company Software 2026 — Simple Loan Management Without NBFC Overkill

Section 8 Microfinance Software — Right-Sized, Not NBFC Overkill

सेक्शन 8 माइक्रोफाइनेंस कंपनी के लिए लोन सॉफ़्टवेयर

Many microfinance lenders in Bihar, UP, Jharkhand and Bengal are Section 8 (not-for-profit) companies, not NBFC-MFIs. They lend small joint-liability-group (JLG) loans to women's groups, collect weekly or monthly, and run 2 to 20 branches. Yet most loan software sold to them is built for large NBFCs — co-lending engines, CIMS reporting, video KYC — at a price a Section 8 company cannot carry.

> This is a general guide, not legal advice. Rules change; confirm your position with your CA / company secretary and the latest RBI and MCA notices.

What the rules say (in short)

• RBI exemption. Under the RBI's Master Direction on microfinance loans (14 March 2022), not-for-profit companies doing microfinance are exempt from registration under sections 45-IA, 45-IB and 45-IC of the RBI Act until their assets reach Rs 100 crore. At Rs 100 crore and above, they must register as an NBFC-MFI. (TaxGuru)
• What a microfinance loan is. A collateral-free loan to a household with annual income up to Rs 3 lakh; loan repayments should not exceed 50% of monthly household income.
• The same fair-practice rules still apply: a board-approved household income assessment policy, a pricing policy with a simple fact sheet of rates and fees, no prepayment penalty, penalty only on the overdue amount, documents in the borrower's language, a grievance process, and no harassment in recovery.
• No public deposits. Neither a Section 8 company nor an NBFC-MFI may take deposits. Collecting "savings" from members is a common route into trouble. (ClearTax)
• New companies: the MCA has restricted new Section 8 incorporations and object changes for microfinance since 2020 unless RBI requirements are met — check the current position before forming one. (TaxGuru)

What a Section 8 MFI actually needs from software

| Need | Why |

|---|---|

| Centres, groups and members (JLG) | Loans are given and collected group-wise |

| Household income check at application | The Rs 3 lakh and 50% repayment rules |

| Weekly / fortnightly / monthly schedules | Matches how collection really happens |

| Field collection on a phone, offline | Centres are in villages with weak network |

| Fact sheet and loan card in Hindi | Borrower's language rule |

| Day-end branch cash and collection report | Branch managers close the day |

| Overdue and PAR reports | Board and funders ask for them |

| Grievance register | Required by the fair practices code |

| Total assets watch | Know well before you reach Rs 100 crore |

What it does not need on day one: co-lending engines, CIMS returns meant for NBFCs, or video KYC.

How MICS helps

MICS builds loan management systems for NBFCs and microfinance lenders, and we set them up right-sized for Section 8 companies — the group lending, field collection and reports above, without paying for NBFC-only modules you do not use. As you grow towards NBFC-MFI, the same system grows with you.

Price for Section 8 microfinance companies

| Plan | Price | Best for |

|---|---|---|

| Pay per active loan | ₹750/month minimum (includes up to 100 active loans), then ₹7.5 per active loan | Up to about 400 active loans |

| Fixed monthly | ₹3,000/month (includes up to 500 active loans), then ₹7.5 per active loan | More than 400 active loans |

Examples: 250 active loans on pay-per-loan = ₹750 + 150 × ₹7.5 = ₹1,875 a month; 600 active loans on fixed = ₹3,000 + 100 × ₹7.5 = ₹3,750 a month. The plan is chosen once at sign-up and cannot be changed later, so pick the one that fits your loan book. See the loan software page.

Our HR system HRPM also runs field-officer attendance with location, which many MFIs use for branch staff.

Search terms this page answers

section 8 microfinance software · microfinance software Bihar · JLG loan software · microfinance loan management software India · माइक्रोफाइनेंस सॉफ़्टवेयर

Related reading

• NBFC and Microfinance Software — Muzaffarpur
• Microfinance Software Delhi — MFI Compliance
• Attendance App Patna — HRPM

References

• Section 8 microfinance — MCA restrictions and RBI framework (TaxGuru, Oct 2026)
• Section 8 microfinance exempt from RBI approval (TaxGuru)
• Microfinance company registration (ClearTax)

Support and demo

MICS (Magadh IT and Consultancy Services Pvt. Ltd.) builds HRPM, e-Court and e-Invoice in India. Call or WhatsApp +91 9355273535, e-mail admin@mics.asia, or ask for a free consultation. Already a customer? Use Help → Support inside the app — your ticket is answered there.