Date:21/05/2008 URL: http://www.thehindubusinessline.com/2008/05/21/stories/2008052152180600.htm

Back ‘Monthly repayment helps’

G. Naga Sridhar

Hyderabad, May 20 Even as some public sector banks are alarmed over the quality of loans in tractor finance, microfinance company Spandana Spoorthy Innovative Financial Services Ltd is upbeat.

It believes the key to ensuring prompt payment of tractor loans is in the repayment mode. “We have introduced a monthly payment system in tractor financing contrary to the practice of half-yearly payment mode of public sector banks and we have no regrets,” Ms Padmaja Reddy, Managing Director, told Business Line here.

The concept of half yearly payment is outdated as the tractors are no longer used only for agricultural purposes, she said adding: “As a tractor can earn a regular income for a farmer in commercial usage. The amount is allowed to accumulate for six months, it becomes difficult for them to pay huge sums at one go.”