VST Tillers Tractors, Union Bank sign pact in Bengaluru to offer farm equipment loans

VST Tillers Tractors Ltd. (VTTL) has signed a Memorandum of Understanding with Union Bank of India in Bengaluru to facilitate retail financing for farmers purchasing tractors and farm mechanisation equipment.

Under the partnership, Union Bank would provide retail loan facilities for farmers in Karnataka and also across the country to buy VST’s range of tractors, power tillers, power reapers and power weeders. The financing facility woul be available through VST’s network of more than 1,000 dealers across India, enabling farmers to access credit closer to their farms.

On the occasion, H.T. Vasappa, General Manager, Union Bank of India, said the partnership would strengthen farmers’ access to credit and enable them to acquire modern farm equipment through VST’s extensive dealer network.

“Affordable financing was an important enabler of farm mechanisation,” said Antony Cherukara, CEO, VST Tillers Tractors Ltd. The partnership, he said, would make it easier for farmers to finance VST’s tractors and farm equipment, and support the adoption of efficient and technology-driven mechanisation solutions.

The initiative was aimed at making farm mechanisation more affordable by easing the upfront financial burden associated with purchasing agricultural equipment, the companies said. The companies expect the initiative to encourage greater adoption of modern agricultural equipment while helping farmers manage their investments through accessible financing options.

Retail finance in SFM

Retail finance in SFM (small farm machine) is a relatively new concept to small and marginal farmers in Karnataka as they are heavily dependent on government subsidies. Retail finance penetration in tractor market in Karnataka is about 10% while farm mechanisation in the State is about 30%. Tractor market in Karnataka is about 56,000 to 60,000 units a year and tiller market is about 5,000 units per year.