Zarai Taraqiati Bank Limited (ZTBL) offers a specialized loan program designed to assist farmers in purchasing new tractors. This initiative aims to enhance agricultural productivity by providing farmers with the necessary machinery to improve their farming operations. By easing the financial burden of acquiring a tractor, ZTBL supports farmers in modernizing their practices, leading to better yields and more efficient farm management.
Table of Content
Program Overview
- Loan Amount: Up to PKR 2.5 million per borrower.
- Eligibility: Farmers with self-owned or self-possessed agricultural land.
- Collateral: Security as per the bank’s policy.
- Disbursement: Pay order or demand draft to the manufacturer/dealer.
- Registration: Joint registration of the tractor in the names of the bank and the borrower.
- Equity Contribution: 10% self-contribution by the borrower.
- Repayment Schedule: 8 years in half-yearly installments.
- Markup Rate: Prevailing bank rate with a 3% rebate for timely repayment.
- Insurance: 1% premium on the tractor loan, inclusive of taxes and levies.
- Monitoring: Strict monitoring by the bank to ensure proper utilization of the loan.
Eligibility and Requirements
To qualify for the ZTBL Tractor Loan, applicants must be Pakistani farmers with self-owned or self-possessed agricultural land. They need to provide a copy of their CNIC, an agricultural passbook, two recent photographs, and a properly completed loan case file. The program is intended for those looking to purchase new tractors to aid in their farming activities.
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Financing Details
The maximum loan limit under this program is PKR 2.5 million per borrower, covering the cost of new tractors. Farmers must contribute 10% of the loan amount as equity, demonstrating their commitment to the purchase. The loan is structured to ensure affordability and manageability for farmers, with a fixed markup rate and potential rebates for timely repayments.
Disbursement and Collateral
Loan disbursement is made via pay order or demand draft to the manufacturer or dealer. The tractor is jointly registered in the names of the bank and the borrower and is comprehensively insured by an “A” rated insurance company. Collateral required includes property or other acceptable securities, hypothecation of the tractor, personal guarantees, and post-dated cheques to secure the bank’s investment.
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Repayment and Markup
The loan repayment period is structured over eight years, with half-yearly installments starting six months after the first disbursement. The markup rate is the prevailing bank rate for development loans, with a 3% rebate for timely repayments, making it easier for farmers to manage their financial obligations while benefiting from the tractor’s use.
Monitoring and Utilization
ZTBL enforces strict monitoring to ensure that the loan is used appropriately. The Manager, Zonal Manager (Recovery), and Internal Auditor of the bank conduct sample checking to verify proper utilization. In cases of misuse, the loan may be recalled in full as per bank policy, ensuring accountability and proper use of funds.
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Conclusion
ZTBL’s Tractor Loan program is a valuable resource for farmers looking to enhance their productivity through mechanization. With competitive financing options, flexible terms, and stringent monitoring, the program ensures that farmers can access the necessary equipment to improve their agricultural output and contribute to the sector’s overall growth.