Purpose & Scope:
Tractor Finance under Khushali Plan is extended to the farmers for purchase of tractor & allied equipment in order to facilitate/encourage mechanized farming in agriculture sector. It is fixed installments product under which a loan can be booked for a period of maximum 7years. The installment comprises of principal and mark up and the Finance is amortized over the whole tenor. The tractor is registered in the name of customer and hypothecated in favor of the bank. As the asset is owned by customer, all taxes, duties and registration fees, insurance premium etc., are paid by the customer. Agriculture credit proposals for Tractor Finance will be initiated by the designated lending branches and will be approved by competent authorities as per approval grid. All checks and due diligence as per bank’s policy will be carried out before a loan is booked. It involves careful evaluation of customer’s repayment capacity by calculating his/ her debt burden and verifying his/ her credentials. The broad based target market for tractor financing comprises of all large/corporate, medium and small farmers throughout Pakistan.
Salient Features/ Key Characteristics Of Tractor:
Tractor is an important asset and mobile power source, with a wide range of applications and its use has significant impact in following key areas:
- Tractor is a flexible source of farm power, and has superior land preparation capacity and highly attractive for all farmers.
- Its possession increases manifolds, the capacity of a farmer to manage land of much bigger size and produce economic surplus, thus adding to wealth of farmer.
- It enables farmers to increase their farm productivity and reduce production cost.
- Releases human resources for other income generation activities and stimulate demand for off-farm services, such as machinery repairs and spare part sales outlets.
- Provides full time employment for tractor operators and their helpers.