How Do Nidhi Companies Raise Funds For Lending And Investing?

How Nidhi Companies Raise Funds

1. Member Contributions: The main funding source for Nidhi Companies is the consistent savings deposited by their members, forming the core pool of funds for lending and investment activities.

2. Savings Accounts: Members deposit money into savings accounts with the Nidhi Company, and these accumulated funds constitute a substantial portion of the company's resources.

3. Fixed Deposits: Nidhi Companies may offer fixed deposit schemes, allowing members to invest lump sum amounts for fixed periods, thereby augmenting the company's funds.

4. Recurring Deposits: Nidhi Companies may provide recurring deposit schemes, fostering a steady influx of funds as members make regular contributions to their accounts.

5. Surplus Funds and Profits: Nidhi Companies accumulate surplus funds from interest on loans and investments, bolstering their capital base for potential growth and sustainability.

6. Gold Loans: If the Nidhi Company offers gold loan services, funds can be raised by accepting gold assets as collateral from members in exchange for loans.

7. Membership Fees and Charges: Nidhi Companies may charge nominal membership fees or service charges, contributing to their income. 

8. Nominal Interest on Loans: Nidhi Companies generate income by charging interest on loans extended to members, establishing an essential revenue stream for the company.

9. Bank Loans (Limited): While the primary source is member contributions, Nidhi Companies, in certain circumstances and subject to regulatory guidelines, may have limited access to bank loans to supplement their funds.