Is Tractor Finance Helping Farmers in India?

Tractors are the mainstay of the agricultural system. The Tractor Finance method helped farmers overcome their financial difficulties and farm mechanization via tractors may be the most significant change in the Indian agricultural farming system.

Tractors are versatile farming equipment in both agricultural and commercial applications. Tractors allow several mounted implements to be easily attached and function for improved crop growth and output results. Tractors play a systematic role in agriculture, from harvesting to ploughing and tilling.

What is Tractor Finance?

Tractor Finance or Tractor Loans are loans given to farmers or business owners to purchase new or used tractors. Tractors of this type can be used for agricultural or commercial purposes. A tractor costs between 4 lakhs and 10 lakhs, making it prohibitively expensive for most farmers to purchase one right away, this is where outside funding comes in.

The Tractor Finance method helped farmers overcome their financial difficulties. To avoid such issues, many government and private banks offer tractor loans on used tractors at low-interest rates of 10.55 percent per annum. On the loan repayment option, the processing fee can be around 0.5 percent for up to seven years.

Many non-banking finance companies (NBFCs) and public sector banks (PSUs) in the country have agreements with tractor manufacturers to provide loans to farmers for tractor purchases.

How Tractor contributes to Agriculture

Farm mechanization via tractors may be the most significant change in the Indian agricultural farming system. As the leading tractor industry grows, the tractor industry contributes Rs 4-5 billion to the Indian GDP.

Tractors are the mainstay of the agricultural system. Farmers' first source of farming equipment must be inexpensive. Tractors are required for farming, covering larger areas of land for farming operations, and must be available at a reasonable price.

Getting a financed loan for your farmland or farming equipment is the better option for those who cannot afford to buy tractors all at once.

Tractor finance has changed dramatically in the last ten years.

Previously, very few government banks offered tractor loans. However, several private and commercial banks now offer simple loan facilities for the growth and development of the farming and tractor industries. Farmers' attitudes have shifted over time, as banks have become more responsive and quick to provide loans. Some banks also offer the option of providing loans while sitting at home and learning about financing schemes.

Also Read: Let's Buy Secondhand Tractors With This Perfect Guideline.