Tractor Loans

Private sector lender DCB Bank on Thursday said it is seeing a good business prospects from rural areas and wants to focus on "encouraging" tractor loans demand from the farming community. The bank is offering customised loans in Chhattisgarh, Karnataka, Andhra Pradesh, Telangana Madhya Pradesh, Maharashtra, Odisha and Rajasthan, which saw a growth in demand last year. The bank is positive about rural prospects, as evident from sales in Q2 FY21, and is expecting incremental growth in business, DCB Bank said in a release on Thursday. Citing a recent Crisil report that tractor sales were up by 12 per cent in first half of FY21, the lender said good monsoon and higher crop production generally support farm incomes and this in turn provides a fillip to tractor demand. Typically, fortunes of the tractor loan business depend on the vagaries of the weather and the harvest season among other macro and micro variables, it said. "The sale of tractors shows a heartening trend, it has posted

Affordable housing and tractor loans are the new business segments that the bank is entering

While disbursements improved in Q3, asset quality trend remains an uncomfortable patch

However, month on month the sales dropped for the second month in a row, after reporting continued growth since April

Analysts at Credit Suisse expect retail loan delinquencies at 5-10 per cent for private banks and 9 - 12 per cent for NBFCs

Tractor sales had crossed the 100,000 mark in October 2018 and October 2019 previously

Poor monsoons in 2014 and 2015 and slower growth in minimum support price over the last two years will continue to weigh on the performance of tractor loans