Loan for Tractors - An Eyewash

There is a huge network of agents in the state that act as a link between the agency that provide the loan i.e. banks and the farmers.The agents convince the farmers to apply for the loan and in the process earns around Rs.20,000 per client .The information imparted to farmers is usually incomplete and the process of granting loan is so fast that before the farmer could think the loan is sanctioned and for rest of his life he works to pay the money back.Here is one such scheme of SBI.

Funding Agency:

State Bank Of India

Krishi Plus Scheme
Purpose : Scheme for financing tractor to Rural Youth for custom hiring.
Eligibility :

• Any rural youth below the age of 45 years, and undergone training in maintenance/repairs of automobiles / tractors.
• The applicant and his family should belong to the small and marginal farmer category.

The applicant should have a valid tractor driving licence and should operate the tractor by himself ie. the tractor should be owner driven.
Loan amount :
As per quotation of the tractor and other accessories including trailer of borrower's choice.
The tractor to be financed should be in the approved list of tractors circulated to the branches by us. 85 % of the cost of the asset is provided as loan. Maximum amount Rs.4 lacs.
Documents you need to provide :

• Land records in the name of your family / applicant (minimum 1 acre) to be submitted. valid driving license.

Disbursement of the loan : The loan amount will be paid directly to the supplier of the tractor and accessories.
Security :

Amount of Loan Security to be furnished

*Upto Rs. 50, 000 Hypothecation of assets financed
*Above Rs. 50, 000 i. Hypothecation of assets financed

& upto Rs. 1, 00, 000 ii. Mortgage of lands or Third party guarantee

*Above Rs. 1, 00, 000 i. Hypothecation of assets financed ii. Mortgage of lands

Repayment : A maximum period of 7 yrs is allowed as per your liquidity position.
How to apply for this loan :
You may contact our nearest branch for the application or even talk to the marketing officers visiting your village and produce the land documents.

The Yatra team came across another such instance in Rajgarh District,MP. Luxminarayan Sharma of Barkhera Khurd was granted loan of Rs.2.70 lakh ,for an Escort tractor seven yaers ago ,by SBI through an agent .Luxmi narayan was not very sure of applying for the loan because of the financilal constraints.The agent however succeded in convincing him by saying he will enjoy higher status among the fellow farmers. To impress him further he was givenRs 1000 for buying gifts for his family (after he applied for the loan) and was escorted back in a car from the bank.

Luxminarayan today curses the day he was sancioned the loan.He has already paid Rs.5.50 Lakh and still pays an yearly amount of Rs. 20,000 .
This is obviously not the only case but it is one of the hundreds of similar cases in the adjoining areas.There is an estimate of over one lakh such cases in the state of Madhya Pradesh .
This calls for a serious enquiry in the whole process.