Multiple choice

Aiming at equitable socio-economic development, the Microfinance sector has grown rapidly over the past few decades. Today, it has evolved into a vibrant industry exhibiting a variety of business models. Microfinance Institutions (MFIs) in India exist as

  1. NGOs (registered as societies or trusts)
  2. Section 25 companies
  3. Non-Banking Financial Companies (NBFCs)

  1. Only 1 and 2

  2. Only 1

  3. Only 1 and 3

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

(MFIs) in India exist as NGOs (registered as societies or trusts), Section 25 companies and Non-Banking Financial Companies (NBFCs).

Under Indian law, 3 legal forms exist for Non-Profit organizations:

1. Trusts 2. Societies 3. Section 25 companies

Due to better laws, Section 25 companies have the most reliable strongest organizational structure. Section 25 companies are those companies which are formed for the sole purpose of promoting commerce, art, science, religion, charity or any other useful object and have been granted a licence by the central government recognizing them as such.

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