This result is due to a poor CIBIL score. When farmers want to borrow money for any kind of agriculture inputs, tractor loan, or any other loans as per their requirement, banks and NBFCs look at their credit scores to see if they are good at repaying loans on time.
Understanding CIBIL Score
The CIBIL score is the summary of your overall credit history generated on your credit report. It mainly plays an essential role in the credit card or loan application process. A low CIBIL score may result in loan application rejection and low chances of approval with high-interest charges or annual fees. A CIBIL score of 750 or more is ideal for the approval of your credit card or loan applications. So, it is important to maintain a good CIBIL score.
In this write-up, we will discuss the top five reasons for farmers to build their CIBIL score and how it will help them get a loan easily.
Reasons for Farmers to Build Their CIBIL Score
Here are the top 5 reasons why farmers should consider building and maintaining a healthy CIBIL score:
Access to Credit Facilities
A high credit score helps in making it easier for farmers to get the financial help they need. Whether they want to buy new tools, improve their irrigation system, or make their farm bigger, a good credit score gives them more choices for getting the money they need.
So, farmers with good credit scores are more likely to get loans as per their requirements and at lower interest rates and flexible ways to pay back the money.
Negotiating Power
A strong credit score not only helps farmers get loans but also makes them better at talking about deals. They can negotiate loans, get good interest rates, or waiver of loan fees.
Being able to negotiate from a strong financial position makes a farmer's business stronger and able to last for a long time.
Diversification of Income Streams
Having a strong credit score is not just for getting regular loans. It also opens chances for farmers to try out other money opportunities. A good credit score also lets farmers look into different ways of getting money, like agricultural crowdfunding or peer-to-peer lending platforms.
By getting money from different sources, farmers can be less reliant on just one way of getting money, making their whole operation stronger and more able to handle challenges.
Insurance Premiums and Risk Management
Farmers have to deal with things they cannot control, like the weather, bugs, and changes in market prices. Handling these risks is a big part of farming. Having a good credit score can help with this too. When insurance companies decide how much to charge for insurance, they often look at a person's credit score.
A good credit score shows that someone is good at managing money, suggesting they will probably pay their insurance bills on time. It can mean lower insurance costs for farmers, which is a smart way to protect their crops and investments without spending too much money.
Technology Adoption and Agricultural Innovation
Banks and other helpers are more likely to lend money to people who are good with money. So, farmers with a high credit score have a better chance of getting money for things like high-tech farming tools and smart irrigation systems. Using these technologies help farmers use their resources better, do less harm to the environment, and make more crops and money in the end.
How Tractorkarvan can Facilitate Access to Credit to Farmers?
Making and keeping a good credit score is not only important for people in cities; it's just as crucial for farmers. A good credit score helps farmers get more chances with money, makes them better at making deals, and adds to the strength and lasting power of their farms. There are many digital platforms like Tractorkarvan which facilitates hassle-free access to credit to farmers with good credit score.
Tractorkarvan is a leading platform trusted by Indian farmers to fulfill their farm mechanization dreams. We offer end-to-end assistance to them to explore, buy, sell, and finance their used tractor. In an era where Tractors are still not accessible to all, Tractorkarvan makes their second-hand tractor buying experience smoother & convenient. In addition to this, we also offer a range of farm implements, harvesters, and Tractors to address all their farming-related requirements.
