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Mr R. Balakrishnan, Executive Director, Andhra Bank, and Mr A. Ramasubramanian, Chief Executive Officer, Eicher Tractors, on their way to sign an MoU for retail financing of tractors in Hyderabad on Thursday. — A. Roy Chowdhury

Hyderabad , March 25

EICHER Tractors, a unit of Eicher Ltd, has entered into an agreement with Andhra Bank for retail financing of tractors to the farmers.

Addressing newspersons here on Thursday, the Eicher Tractors Chief Executive, Mr A. Ramasubramanian, said farmers would get several benefits through the pact. Against the norm of 25 per cent margin money for tractor and implements, Andhra Bank would finance the tractors with just 15 per cent margin money.

The Andhra Bank Executive Director, Mr R. Balakrishnan, said the bank would offer the lowest interest rates of 10.25 per cent per annum for loans of up to Rs 2 lakh and 10.75 per cent for above Rs 2 lakh. For the loans of below Rs 2 lakh, the farmers would get a benefit of 225 basis points as the rate charged by the bank generally was in the range of 12.5 per cent.

Apart from offering the facility of nine-years of repayment schedule, the bank also extends the benefit of half-yearly and yearly instalments from the farmers, Mr Balakrishnan said.

On its part, Eicher is offering a benefit of Rs 5,000 of discount on invoice price of the tractor, 2,500 hours warranty on 30 HP and above tractors and 12 labour-free services, Mr Ramasubramanian said.

Having already entered into tie-ups with 15 more public sector banks (PSBs) for retail financing of tractors, Eicher is expecting to sell at least 25 per cent of volume or around 4,000 through this route, while the total volumes for the fiscal were expected to be around 16,000 tractors, Mr Ramasubramanian said.

Stating that the demand for tractors has been picking up, he said Eicher was currently enjoying a market share of around 10 per cent in the domestic market. "We are confident of reaching the target of 15 per cent market share in the next couple of years."

More Stories on : Alliances & Joint Ventures | Farm credit | HCV/LCV/Tractors

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