The Indian agriculture sector has a very long history and even today it accounts for the bulk of India’s economy. Agriculture employs more than 50% of the total Indian working population.
Demand for agricultural products continues to grow because of the increasing population. This, in turn,has seen a surge in the demand from the sector to find ways to increase farming output. To assist farmers in achieving this goal, the financial institutions are providing different kinds of funding to them.
Tractors are among the most important of agricultural equipment; however, there are many farmers who cannot afford an outright purchase. This is why many non-banking finance companies (NBFC) and other financial institutions have understandings with the tractor manufacturers. The Indian tractor market is one of the largest in the world.
Securing Tractor Financing
First, farmers must contact dealers who sell tractors or they can also approach the institutions directly.An increasing number of farmers who want to avail tractor finance are directly approaching the lenders because of improved branch networks in semi-urban and rural areas.
Lenders have developed this kind of agriculture equipment funding considering the unique requirements of rural borrowers. The entire procedure is simple, quick, and straightforward, aimed at helping farmers. The documents needed to avail such funding are minimal and involve faster processing to reduce the time taken for disbursal. Such loans are available for different brands of tractors and many NBFCs offer online application for the loans to make it more convenient to farmers.
As with other kinds of loans, the eligibility of the borrower for a tractor loan depends on his credit history and specific requirements. This kind of funding is available to salaried individuals, who are agriculturists. The amount available also varies and depends on the kind of tractor. Lending institutions may fund as much as 90% of the total cost of the tractors, which under certain circumstances may be extended to 100% of the total price. Farmers do not need to mortgage their lands to avail this kind of funding, which means there is no risk of losing their only assets to lenders.
Interest rates vary from one lender to another and depend on the specific situation of the borrowers. Nonetheless, farmers are often provided agriculture equipment loans at lower interest rates to provide a further impetus to this sector. Farmers can also benefit from the flexible repayment plans, which vary from monthly to quarterly and even half-yearly.
The agriculture equipment industry is growing at a steady pace and manual labour is an important element of rural India. Tractors are an important part of modernizing this ageless sector and bringing automation into the industry. The importance of this move is now recognized by financial institutions across the country, which is why there has been an increase in the availability and flexibility of such offers. Tractor loans are customized to meet the needs of the rural population, making it easier for farmers to borrow and repay loans to purchase tractors.
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