A Nidhi Company is a business structure which was established under Section 20A of the Companies Act, 1956 (Section 406 of the new Companies Bill 2012, as passed by the Lok Sabha) and is solely governed by the Ministry of Corporate Affairs (MCA).
How Does a Nidhi Company Works?
A Nidhi Company was formed primarily to instil the habit of small savings among its members for their mutual benefit and to encourage members to build an investment habit. The members’ contributions are the primary source of funding for a Nidhi company.
Typically, loans are granted at much lower interest rates to the members for various purposes, such as house construction or repairs, emergency loans, personal loans etc., to provide membership benefits. The loans are generally considered secure, with a lower credit risk of defaulting.
The concept of Nidhi company formation is quite different from other banking and NBFC companies. Some essential points and criteria are present in a Nidhi company, which should be kept in mind before applying to become a member.
There are a few Nidhi companies available in India which have been running efficiently & smoothly for years. Some of India’s top NIDHI organizations in India is
- Maben Nidhi Limited
- Mini Muthoottu Nidhi Kerala Limited
- Kalayil Nancy Nidhi Limited
FAQ Related Nidhi Company
Nidhi company is primarily an NBFC that deals in financial activities like lending and depositing of cash and hence the data of the transactions is highly important which requires to be kept safe & secure, therefore a Nidhi Company needs software which can manage financial activities efficiently & seamlessly without any complexity. The system of Nidhi company is complex and time-consuming so if you want to run a Nidhi Company efficiently with ease, then there is no substitute for Nidhi software.
Some of the key advantages of Nidhi Company that leads to opt for Nidhi Company and these points are; Easy Formation, Lower Risk, A Safe Savings Scheme, Simple Seamless Process, Limited Requirement of Capital, No Interference Outsiders, Good Instrument for Regular Small Savings and many more.
