Top Microfinance Companies in India (2025 List): Services, Interest Rates & Eligibility

If you run a small business or need a small loan to manage your money, microfinance companies in India can help you. These companies give small loans to support people who need easy access to finance.

Let’s understand what microfinance means and how it works. You will also find a list of microfinance companies in India here.

What is Microfinance

Microfinance means giving small loans and basic banking services to people who cannot get support from normal banks. It helps low-income families, small shop owners, self-employed workers and community groups. It is given to them to use as small amounts of money for their daily expenses or to grow their small businesses. So understanding the microfinance companies is important for them.

How It Works

Microfinance companies follow a simple process. They check your income, basic documents and repayment capacity. Many lenders use group-based lending, where a small group supports each other’s repayments. Others offer individual loans based on your financial profile. After approval, the loan amount is given directly to your bank account and you repay it in weekly or monthly installments with interest. This is how it works.

Market Trends and RBI Reforms Affecting Microfinance Operations

The RBI and industry associations have adjusted rules to give NBFC-MFIs more flexibility. For example, in 2025, the RBI reduced the qualifying asset criteria for NBFC-MFIs from 75% to 60% so institutions can diversify their portfolio while remaining within the NBFC-MFI framework. This affects the microfinance companies list as they adapt products. 

Industry reporting from MFIN and SIDBI shows NBFC-MFIs remain a large part of the microfinance market, though asset quality pressures affected growth in FY25. These dynamics influence interest rates and approval speed.

Top Microfinance Companies in India

These are the top 10 microfinance companies you should know about:

These are the microfinance company examples.

Note: These rates are only general ranges seen across different lenders and customer types. The exact rate you get will depend on your profile, loan product, location and the lender’s costs. You can see from the industry reports (like MFIN) how the rates are charged by each lender and the usual range in the market.

Features of Microfinance Institutions List

• Offer small loan amounts that match daily business or household needs.
• Provide quick approval when your basic documents are in place.
• Allow flexible repayment schedules.
• Serve customers in rural and urban areas through easy-to-reach branches and teams.
• Follow simple eligibility rules so more people can access credit.

Benefits of Choosing Microfinance Companies

• Help small shop owners, self-employed workers and families get funds when regular bank loans are difficult to access.
• Support women entrepreneurs and rural borrowers who may not have a credit history.
• Improve financial stability by giving timely credit for business growth or personal needs.
• Offer doorstep support through field officers, making the borrowing process easier.
• Encourage financial inclusion by bringing more people into the formal financial system.

What You Should Know About the Typical Interest Rates and Fees

In 2025, the effective annual rates charged by major NBFC-MFIs and SFBs typically range from about 18% to 26%, though some products or geographies can push that band slightly higher. Industry rate tables published by MFIN show lender-level variations and are the best source for current sheets. Always check the lender’s product chart for processing fees and GST, which add to the effective cost.

Pros and Cons of Microfinance NBFC List in India

Here are the main advantages and limitations of using microfinance companies in India. This helps you decide if these services fit your needs.

Pros:

• You can get small loans even if you do not have a strong credit history.
• Quick approval because most microfinance companies use digital checks.
• Simple documents compared with traditional banks.
• Useful for women, small shop owners, home-based businesses and new entrepreneurs.
• Many microfinance loan providers in India offer group loans, which reduce the burden on one person.
• You get doorstep support from many field officers.
• Repayments are usually weekly or monthly, which helps you manage your cash flow.

Cons:

• Interest rates are slightly higher compared with regular bank loans
• Loan amounts are small, so they may not suit big business plans
• Some borrowers may feel pressure in group-lending models
• Delayed repayments can increase your overall cost
• You must repay on time to avoid strict recovery rules

Eligibility and Documents Required by The Microfinance Loan Providers in India

Common eligibility criteria:

• Minimum age 21 to 65
• Proof of stable income or business activity, even if informal
• KYC documents

Typical documents:

• Identity and address proof
• Bank statements or business proof
• Photographs and signed application forms

The Approval Speed of Microfinance Companies in India

NBFC-MFIs and SFBs can approve small-ticket loans within a few days when credentials are in order. Larger loans or loans to new customers can take longer. Field assessment and verification are common, so you need to plan for 3 to 7 business days on average for many lenders.

How to Apply Using My Mudra to Connect You to Microfinance Companies in India

My Mudra is a channel partner that helps you compare offers from banks and NBFCs. If you are looking for microfinance loan providers in India, you can:

• Visit My Mudra and choose the relevant loan category
• Share basic details and documents once, as we connect you to lenders that fit your profile
• Compare rates, fees and repayment terms from multiple microfinance companies
• Proceed with the lender that suits you best, as we support application tracking and documentation help

Using a channel partner like My Mudra can help you avoid repeating paperwork and let you see multiple lender options side by side.

How Can You Choose the Best Microfinance Companies in India

• If you want a fast and small loan in a rural area, look for NBFC-MFIs with local outreach and good collection practices.
• If you prefer regulated bank backing and deposit products too, consider an SFB such as Ujjivan or Equitas.
• For the best published rates and transparent product charts, review MFIN member rate sheets and lender product charts before you accept an offer.

Summing Up

Microfinance is still very important in 2025 because it helps people across India get easy access to money when they need it. With many RBI-regulated microfinance companies in India, borrowers now have more choices and clearer information. The right lender depends on your income, application, credit history and the purpose of your loan. It is always a good idea to compare interest rates, processing fees and eligibility before you apply. So choosing the best option is important for you. A microfinance loan can support your business, household needs or financial plans with more confidence.

If you want a simpler way to compare lenders, you can use platforms like My Mudra. We allow you to check the microfinance companies in India in one place, making the process easier for you.

Also Read:
- Best Instant Micro Finance Loan Apps in India 2025 - 2026
- Micro Finance - Definition, Features & Significance