Chennai, Tractor manufacturer TAFE today shook hands with City Union Bank over an agreement under which the bank will provide quicker and easier finance for those who buy the company’s tractors.
A farmer could avail himself of a loan paying only 5 per cent of the tractor’s cost upfront. A typical loan arrangement will be for an interest rate of 11.75 per cent and a period of seven years.
For TAFE, which is the country’s second largest tractor manufacturer (after Mahindra & Mahindra), this is not the first agreement with a bank, but for City Union Bank it is the first and the only one with a tractor company.
At a press conference here, the Chairman of the 103-year old private sector bank, Mr S. Balasubramanian, said that the bank expected disbursal of Rs 150 crore (for about 5,000 tractors) between now and March next.
TAFE, which sold 80,000 tractors last year (75,000 of them in India), sells the machines in three brands — TAFE, Massey Ferguson and Eicher — the last having come into its fold through an acquisition in 2005. The company has 21 per cent share of the 3.52 lakh tractor market.
TAFE’s Managing Director, Ms Mallika Srinivasan, said at the press conference today that she expected tractor market to grow to 3.7 lakh units in the current year. The Rs 3,000-crore company has just launched a new range of tractors designed exclusively for the North American market, she said.
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