Nidhi Company Overview
Nidhi Companies are registered under the Companies Act 2013, making them fall under the governance of the Ministry of Corporate Affairs. They are established with the main objective of cultivating the habit of thrift and saving amongst the members based on the concept of “Paraspara Sahayata,” the Principle of Mutuality. Nidhi company software is fully automated and highly secured. Nidhi Company Loan Software with Recurring Deposit, Fixed Deposit, accounting module & reporting engine made exclusively for Nidhi Societies.
Nidhi Companies render financial assistance to their members by encouraging them to make short or long-term deposits (recurring, fixed, savings account, daily and monthly-deposit scheme), invest in Nidhi bonds or shares and also offer them loans against a collateral (Precious Metal/Jewelry like Gold & Silver, Property like Home or Land, Vehicles like Car & Bike, Insurance Policies, Savings Certificates, Bonds, and Deposits).
These organizations are usually promoted by affluent locals and professionals including retired workers. They generally operate locally within the stipulated boundary of village municipalities or panchayats. Several Nidhi Companies have ventured out of their boundaries and expanded their horizon by establishing branches in their designated revenue districts and sometimes even outside. Their policy of mutuality would only be extended to members who are individuals, Corporate bodies or trusts have no prospect of becoming a member of a Nidhi Company.
The Loan Process
A person who desires to become a member of a Nidhi Company has to submit relevant KYC documents which prove that they are 18-years and must be an Indian Citizen. Once the age and address/ID proof is verified, the member could choose to either purchase a minimum of one equity share or pay a stipulated membership fee.
Once a person becomes a member of a Nidhi Company, they’d be entitled to take advantage of the financial product and services which are offered only to members. They’re free to open a deposit, purchase a bond, buy more shares or even apply for a loan. Most of the time, the loans are offered to members at a nominal rate when compared with other options available in the market.
Challenges faced by Nidhi Companies
Since they don’t deal with funds of anyone else other than their members, regulatory bodies don’t impose too many restrictions on them. Though Nidhi Companies don’t have to face the brunt of the regulatory pressures like its fellow financial inclusion enablers like NBFCs and MFIs, they’ve their fair share of battles to deal with. Listed below are few of the common issues faced by Nidhi Companies:
As the deposits which Nidhi companies receive from the members are the only form of fund they receive, they could not exactly afford to spend much on IT expenditures or technology solutions. So, they often resort to using distinct off-the-shelf products for specific tasks which might make the task of consolidating the results from each of them to be a long and time-consuming process.
Though they’re not subjected to strict regulatory compliances by RBI or other legal entities, the Reserve Bank still keeps a close watch on their deposit accepting operations and so it is important to ensure that they keep up with the norms and ensure accurate, transparent norms of records.
Even today, Majority of the Nidhi Companies rely primarily on manual labor and paper-based process. Often their back-office workers are flooded with bundles of papers.
This high dependency on manual labor and processing could make the entire process very slow and costly. In addition to that, it could also lead to inconsistent results that end up generating a rather high error rate. Minimizing these needless expenses and errors seems to be the most challenging aspect faced by every Nidhi company.
All these challenges can be overcome by Nidhi company software like Finabile, which is a prominent loan software used by top lending institutions around the world.
Finabile: Best-in-Class Nidhi Company Software
Finabile is the most convenient and user-friendly cloud-based Nidhi company software which could completely turn around the poorly performing lending portfolio to an exceptional one.
Finabile is the right Nidhi Company software which requires a robust technology backed lending software that could accelerate their loan volumes by injecting automation into the loan approval process and reducing manual interventions.
Finabile is a mini-banking suite which has all the functionalities of a traditional banking software like opening savings accounts, accumulating deposits, managing investments, an inbuilt accounting tool, reporting engine and even a designated module to manage the complete loan portfolio. Nidhi company software is a user-friendly and customized tool to manage Nidhi company. The highlights of this Nidhi company software is simplicity that can handle complex problem very easily.
It even offers an ability to link a loan item with the corresponding deposit or savings account and makes the entire mutuality principle a great experience for both borrowers and loan officers.
100+ Tailor Made Reports
Supports Multiple Language
Super Fast Processing
Completely Scalable Solution
Nominally Priced Solution
Effortless API Integration
Sturdy Reporting Module
Loan Lifecycle Management
Finabile comprises of a completely automated loan origination module which not only covers the end-to-end origination cycle of Nidhi Companies from application upload to validation, credit risk assessment & rating to approval but also includes exclusive modules for starting deposits, savings account and investments.
Our solution is completely scalable and could be tailor-made to fit the requirements of a Nidhi Company. Be it, creating a Recurring Deposit or opening a membership account or Sanctioning loan to a member, Finabile could help them complete the whole process in mere seconds.
- Effortless Onboarding
- Customizable Account Features
- Deposits Module (Recurring, Monthly, Daily, Fixed etc.)
With Finabile by their side, Nidhi Companies could not only streamline their deposits and loan process but could also take care of their organizational management aspects. In addition to processing deposits and loan products, they could also track, monitor and manage them accurately.
Every aspect of the deposit element and loan product like interest rate, time period, processing fee or charges, payment schedule, etc. could be customized as required.
- Multi-Branch Management
- Customizable Loan Products
- Employee and Organization Management
Finabile would inject automation into the loan collection process and standardize the collection workflow by enabling the Nidhi Companies to supervise the assigned employees and prioritize bad debts.
With our transparent lending solution keeping track of delinquencies in repayment is almost effortless with the options to track or monitor every relevant detail like disbursal date, repayment time, a number of outstanding arrears, change in interest rate, write-off etc in the click of a mouse.
- Loan Performance Tracker
- Powerful Delinquency Monitor
- Immediate Payment Updates
Our best-in-class Nidhi Company Software comes with a robust backend accounting module which comprises of features that could rival a traditional accounting management tool. With its broad range of features from Double-Entry Accounting System, Expenditure Management, Funds Management and Mapping, Customizable accounting configurations, Chart of Accounts, Liability Tracker, etc.. Finabile completely eliminates the need for a third-party accounting software.
- Accrual & Cash- Based Accounting
- Customizable Accounting Rules
- Configurable Frequent Postings
- Journal Entries (Manual or Automated)
Our Powerful Reporting Engine has a broad range (nearly 100+) of ready-to-use reports which could be utilized for visualizing the data, keeping track of key parameters, and improving the decision-making process. Finabile’s all-in-one interactive dashboard will offer in-depth insights which could help Nidhi companies make arrive at intelligent business decisions swiftly.
- 100+ Conventional Reports (General Ledger (GL) Report, Balance Sheet, P&L Statement, Total Deposits, Outstanding Loan Value, Active Members, Non-Performing Assets, etc)
- 6 General Formats (Clients, XBRL, Accounting, Loans, Savings, and Funds,)
- 4 Styles (XML, XBLR, CSV, and PDF)