DCB Bank to focus on tractor loans for the rural markets

Bhubaneshwar. DCB Bank’s Head of Agri and Inclusive Banking Narendra Nath Mishra said, “The sale of tractors shows a heartening trend, it has posted positive growth in key markets. The tractor market is expected to remain buoyant in the months to come. Demand for our tractor loans is particularly encouraging from the farming community in states such as Odisha, Maharashtra, Madhya Pradesh and others. The government’s agri initiatives, in particular the direct benefit mechanism, schemes such as Swamitva for property cards, innovative farming solutions and infrastructure building, will continue to boost the farm sector. Going forward, DCB Bank will focus on tractor loans in addition to other loan products such as Kisaan Credit Card (KCC) and Gold Loan for semi-urban and rural customers.”

The Bank is positive about rural prospects, as evident from sales in Q2 FY21, and is expecting incremental growth in business. Typically, fortunes of the tractor loan business depend on the vagaries of the weather and the harvest season among other macro and micro variables. As a recent Crisil report points out, in spite of the pandemic, tractor sales are up 12% in the first half of FY21. Good monsoon and higher crop production generally support farm incomes and this in turn provides a fillip to tractor demand. DCB Bank tractor loans come with unique features. For example, a farmer availing of the loan can customize loan repayments based on his or her cash flow. The borrower can plan repayments in advance depending on the use of the asset (tractor, in this case) and agricultural season (when he or she expects to sell the harvested crop and earn a higher income). This is significant as a farmer’s income is variable and moves in tandem with the harvest season. Once the loan is approved, the Bank’s free SMS service reminds the customer about the due dates for loan repayment.

Even farmers with one acre of agriculture landholding are eligible to apply for a tractor loan provided they have all the relevant documents. DCB Bank also provides Tatkal service for customers who offer a higher margin, or the initial down-payment. Here, the loan is disbursed to the eligible customer within just three workings days.