Nidhi Company is yet another popular form of company that people starting business prefer. The word Nidhi originates from the Hindi language which means treasure, taking a cue from its meaning, Nidhi Company refers to a company that has been established with the objective of developing the habit of thrift and savings amongst its participating members.
As per the Indian, Financial sector Nidhi Company refers to a mutually benefitting society which has been notified by Central government or Union government.As mentioned above Nidhi Company is mutual benefiting company wherein the funds are used by its members as far as the funding is concerned, the money is contributed by the participating members and the dealings are also restricted to the members forming the Nidhi Company. The members can take a loan at a reasonable rate for various objectives like house constructions repair etc. The principal source of funds is the contribution from the members.