COMMERCIAL LEASE FINANCE TRACTOR SCHEME  

PURPOSE:

For Purchase of Tractors to be used in Agri related activities. The terms and conditions will be according to the structure of Lease Companies.

ELIGIBILITY:

Farmers, self-employed persons/firms/companies/institutions related directly or indirectly related with Agri Business.

AMOUNT OF FINANCE:

The amount of finance will be 80% of purchase price of the Tractor and lessee/borrower will contribute 20% equity towards the purchase price of Tractor.

SECURITY

1.     Tractor itself which will be Registered in the name of Bank.

2.     Two personal guarantees of the persons having good market reputation and acceptable to the Bank. The guarantors should be having sufficient assets to cover the amount of finance. The Manager and ACO will verify the worth and market reputation of client and guarantors.

3.     Comprehensive insurance of the assets (with Bank mortgage clause) and life assurance of the borrower.

RATE OF RENTAL INCOME/MARK UP:

Average Six months KIBOR + 500bps (5.00%) with floor of 10% per annum.

PERIOD OF REPAYMENT:

In five years 60 monthly installments (Principal + Markup).  The installment will start from the month of delivery of tractor.

Sixty post dated cheques equal to the amount of installment (Principal + Markup) will be obtained from the borrower at the time of disbursement.

INSURANCE:

Insurance coverage of agriculture finance is compulsory. Comprehensive Insurance of asset acquired and Life Insurance of borrower should be arranged through Head Office at the cost of borrower.

DOCUMENTATION

Applications will be entertained on Agriculture Loan Application Forms. ACO and Branch Managers will conduct verifications as in vogue in other Agriculture Credit Schemes. All charge documents as per Lease Finance Tractor Scheme will be obtained along with 60 post dated cheques.

DOWN PAYMENT

Total down payment includes equity (margin), processing charges, Insurance Premium for first year.

PENALTY/PRE-PAYMENT

Late payment surcharge @ 5% on amount of installments delayed.

Pre-payment penalty @ 5% on principal outstanding. However, if the customer repays in order to obtain finance for new tractors no penalty may be charged.

LOAN APPROVING AUTHORITY

Regional Chiefs/Chief Manager, Main Branch, Lahore will approve loans.

CREDIT BUREAU

State Bank of Pakistan has a Credit Information Bureau (CIB), which maintains credit information of company’s as well as individuals. Another independent consumer Credit Bureau by the name of Data Check (Pvt) Ltd. is also operating in the country containing negative data of large consumer Banks. CIB report will be obtained for the cases of Rs.500,000/- and above whereas report from Data Check (Pvt) Ltd or confidential reports from other Banks will be obtained for the cases below Rs.500,000/-.