SBI signs MoU with KOEL for financing Mega T-Power Tillers

India’s largest bank, State Bank of India (SBI), with a branch network of around 17,000 and agri customer base of around 1.2 crore has played a vital role in shaping agriculture credit base of India. To keep pace with the modern advancements and growing multifarious credit need of agri customers it has set a milestone in developing various innovative products and strategies. In recent times, the Bank has been working with corporates to develop risk mitigated, value chain financing solutions that can cater to all stakeholders –starting from the farmer to the distribution channel partners. Today, the Bank has taken yet another step in this space with the launch of a new product for financing small and marginal farmers for purchase of Power Tillers manufactured by Kirloskar Oil Engines Limited.

An MOU was signed between SBI and Kirloskar Oil Engines Limited for financing loans to farmers for purchase of Mega T-Power Tillers at attractive interest rate for 3 to 5 years. Shri K.M.Trivedi, Chief General Manager (Rural Business) of SBI and Shri T Vinodkumar, Chief Financial Officer, Kirloskar Oil Engines Limited signed the MOU.

Kirloskar as a brand has been associated with the Indian farming community for many decades. In agricultural sector, Kirloskar fulfills the motive power needs of customers globally; essentially farmers, who require products in the range of 3 hp to 30 hp. Kirloskar after studying the needs & purposes of farmers across India, has developed & launched its Product “Mega T” in the Farm Mechanisation segment.

Speaking on the occasion, Shri K.M.Trivedi, Chief General Manager (Rural Business), State Bank of India (SBI), said, “Though India has the largest volume market for tractors; the availability of average land holding is 1 to 2 acres in most of the areas in the country. With the advent of modern technology and various finance options now farm mechanization is more affordable to farmers of India. To achieve the projected target of 280MT of food grains by 2020-21, Farm mechanization is an inevitable way. Digital innovation, farm mechanization and flexible financial services will together enhance agri scenario in India”.

Mr. T Vinodkumar, Chief Financial Officer, Kirloskar Oil Engines Ltd. (KOEL) highlighted that the, “tie-up is aimed at boosting economic activity in rural areas by creating demand through efficient and quicker credit availability for the farmer. This arrangement will enable us to fulfill our social commitments towards the upliftment of farmers. He also mentioned that SBI with its pan India presence and large network provided an ideal opportunity for deep penetration into the rural market.”

Mr. Antony Cherukara-VP Corporate Strategy & Business Head Agriculture, KOEL stated that, “In order to keep up with the pace of modernization of agriculture, use of appropriate technology has become inevitable. In the prevalent conditions of Indian Agriculture, considering the fact that the majority of Indian farmers are small with land holding below 2 hectare they can hardly afford costlier tractors and manual labor. This tie-up with SBI would be a boon for the farming community. Mega T Power tiller is undoubtedly an intermediate technology as it bridges a very important gap between inefficiencies of manual techniques and unviable cost of using bigger tractors.”

General Manager SBI Shri J.K Thakar added, “With this, the Bank is looking to strengthen the ‘Farm-to-Fork’ program and increase agricultural lending through corporate partnerships. Thorough this finance, both the bank and the stake holders be benefitted as well”.