What is Tarun Loan Under Mudra Yojana

The Pradhan Mantri Mudra Yojana (PMMY) was a 2015 scheme instituted to aid the growth of MSMEs  within the non corporate and non farming sectors. It does so by providing loans of upto Rs. 10 Lakhs through three different loans under its banner.

MUDRA(The Micro Units Development and Refinance Agency Ltd.) was set up by the Union Government to supervise this venture and was tasked with directing Commercial Banks, Regional Rural Banks (RRBs), Small Finance Banks,  Non Banking Financial Companies (NBFCs) as well as MFIs to issue such loans to MSMEs . These MSME loans can be divided into three categories based upon the loan amounts involved:

  • Shishu Loan- Loans of upto Rs. 50,000
  • Kishore Loan - Loans between Rs. 50,000 and Rs. 5 lakhs
  • Tarun Loan - Loans between Rs. 5 lakhs and Rs. 10 lakhs

This article will look into the features, eligibility requirements and procedures associated with  Mudra Tarun loans.

Features Of The Mudra Tarun Loans

Tarun Mudra loans are at the higher end of the range of loan amounts under this scheme. It provides sums of Rs. 5 lakhs to Rs. 10 lakhs with term periods ranging between 3-5 years, similar to other categories of Mudra Loans. These amounts may either be suited towards established small enterprises that are looking to expand and scale upwards, or newer enterprises that require a high amount of start up or working capital. As in the case of the other categories of loans under this scheme, they can be used for a variety of purposes such as expansion, purchasing equipment, renovation or as working capital among others.

 The processing fees in this case are o.5% of the loan amount and Interest rates  vary depending upon the borrower’s credit history, repayment capacity or tenure as well as the financial institution they solicit the loan from. However, they generally do not exceed 12% per annum. This is because loans under the scheme are meant to allow MSMEs to make use of the capital they gain from these loans without the burden of high interest rates as they might face when soliciting regular business loans from financial institutions.

Application Procedure for Tarun Loan 

The procedure to be followed when applying for Tarun Mudra loans is as follows:

  • Step 1: The application form is available for download at the URL https://www.mudra.org.in/Home/PMMYBankersKit.
  • Step 2: Fill in the information requested in the form correctly.
  • Step 3: Find a financial institution that provides Tarun loans and formally apply for a loan either in person or through online portals.
  • Step 4: Fulfil the prerequisite formalities.
  • Step 5: Once the above steps are completed, the institution will review your credentials and provide you a loan based on their assessment and your requirements.

Documents to be submitted for availing Tarun Mudra Loan

  • Identity Proof such as Voter ID, PAN Card, Aadhar Card, Driver’s Licence, Passport or any other government issued photo ID
  • Residence Proof such as telephone or electricity bills, property tax receipts (not older than 2 months), Aadhar Card, Voter ID, Passport, Bank passbook or account statements or domicile certificates issued by the concerned local body
  • Two recent photographs (not older than six months)
  • Balance sheets for the business with respect to the last two financial years
  • Income tax and sales tax returns
  • Bank account statements for the previous 6 months
  • Estimated balance sheet for the next 1 year or for the required loan duration
  • Memorandum of association and articles of association, if applicable
  • Sales made in the current financial year before applying for the Tarun Mudra Loan
  • Reports explaining the economic and technical sustainability of the business
  • Proof of the Identity/Address of the business or enterprise with copies of relevant licenses, registration of ownership etc
  • Proof of category such as SC/ST/OBC, if applicable

The easy application process, low interest rates, high loan amounts, reasonable interest rates and flexible tenures allow the owners of small enterprises and budding entrepreneurs to utilize Tarun loans in growing their businesses. The availability of Mudra Loan cards allows borrowers to access funds without having to make repeated visits to financial institutions.

The Tarun Mudra Loans offered on the Finserv MARKETS portal possess all these features and have an easy online application process that may provide you with the funds you need in order to take your business to the next level.

For capital requirements that are larger than Rs 10 lakhs, the Bajaj Finserv Business Loans available  on the Finserv MARKETS portal can help you avail amounts up to Rs. 30 lakhs. These loans include special Business loans for Women and MSMEs as well and provide flexible EMI payments and zero-collateral offerings. The Finserv MARKETS portal provides an entirely online application process with instant approval in as little as 3 minutes. 

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