Magma Fincorp to double tractor portfolio

Kolkata-based Magma Fincorp Limited is aiming to double the tractor portfolio next year to cover 50,000 units from around 26,000 units in the current year.

The private non-banking finance companies account for 70 per cent of the tractor finance business, which enjoys the rate of interest of around 18 per cent as compared with about 14 per cent on regular vehicle loans.

While the regular commercial banks see recovery as a major issue with regard to term loans extended to farmers towards purchase of tractors, customers and tractor dealers on the other hand are opting for private NBFC loans owing to quick loan sanction and quicker retail cycle time (RCT) respectively, according to Dhrubashish Bhattacharya, vice president and head of Magma Fincorp's tractor vertical.

 

“This is helping every one of us grow very fast in this business, even though the rate of interest on tractor loans charged by public sector banks is low,” he said on Monday. The company has so far sanctioned tractor loans amounting to around Rs 600 crore in the current year as compared with Rs 462 crore in 2010-11.

The company, which launched tractor business three years ago , is expected to end this year with a 5 per cent share of the total tractor market, which is dominated by Mahindra Finance among other players, according to Dhrubashish.

Gujarat, Rajasthan, Madhya Pradesh, Maharashtra and Tamil Nadu were growing fast in terms of tractor sales while states like Karnataka, Andhra Pradesh were seeing a marginal growth this year, he said.