ABC Financial Services, a community-based financial institution, is exploring the incorporation of a Nidhi Company under Nidhi Rules, 2014. The institution seeks your advice on the benefits of incorporating a Nidhi Compa

Benefits of incorporating a Nidhi Company under Nidhi Rules, 2014 are as follows: Mobilization of Small Savings: A Nidhi mobilizes small savings, mostly of the middle class and disburses loans to eligible borrowers. Owing to their small size and closeness to the customers, disbursement of loans is speedy. This is especially useful in case the borrower is in urgent needs of funds. Minimal risk of Loan Repayment: The repayment is guaranteed, as the loans are secured and due to peer pressure, borrowers ensure that loan is repaid on due dates. Higher return on investment: Nidhis offer a higher rate of interest on deposits. This makes it an attractive investment opportunity for people, especially the senior citizens. Professional Management: The Board of Directors of a Nidhi normally consists of senior persons who have experience in handling finances and who are well respected in social circles. This lends credibility to the institution and instils confidence in the minds of borrowers and depositors. ABC Financial services is advised accordingly.