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

VST Tillers Tractors, a leading tractor manufacturer, and Union Bank of India have entered into a Memorandum of Understanding in Bengaluru to provide agricultural equipment loans to farmers. The partnership aims to facilitate retail financing for farmers purchasing tractors, power tillers, power reapers, and power weeders from VST's extensive dealer network.

Union Bank will offer retail loan facilities across Karnataka and the entire country, enabling farmers to access credit closer to their farms. H.T. Vasappa, General Manager of Union Bank of India, stated that the collaboration would strengthen farmers' access to credit and promote farm mechanisation through VST's dealer network.

Antony Cherukara, CEO of VST Tillers Tractors Ltd., added that the initiative would make farm mechanisation more affordable by easing the financial burden associated with purchasing agricultural equipment. Both companies expect the partnership to encourage the adoption of modern agricultural equipment and help farmers manage their investments through accessible financing options.

Retail finance for small farm machines is a nascent concept in Karnataka, with the current penetration in the tractor market being around 10%. The State's farm mechanisation rate stands at approximately 30%, with the tractor market generating 56,000 to 60,000 units annually and the tiller market producing 5,000 units per year.