A Nidhi Company is a type of non-banking financial company (NBFC) recognized under Section 620A of the Companies Act, 2013, and governed by the Ministry of Corporate Affairs (MCA). It is primarily formed with the objective of cultivating the habit of thrift and savings among its members by facilitating borrowing and lending activities within a closed group of members.

The main aim of establishing a Nidhi Company is to promote financial inclusion by encouraging members to save and lend among themselves. These companies operate on the principle of mutual benefit and are often referred to as “People’s Banks.” They focus on providing affordable credit and fostering a savings culture among members.

Registering a Nidhi Company is a streamlined process that encourages small savings and provides affordable credit to members. It is an excellent option for entrepreneurs aiming to create a mutual benefit society with a focus on financial inclusion. Proper compliance and regulatory adherence are essential to ensure smooth operation and sustainable growth.