The country's second largest two-wheeler maker Bajaj Auto today announced a tie-up with State Bank of India to offer inventory finance to its dealers.

"We are glad to partner with SBI who have the largest network of more than 13,000 branches spread across the nook and corner of the country," Bajaj Auto President (Motorcycles) S Sridhar said.

SBI Chief General Manager (Small & Medium Enterprises) Manas Kumar Nag said, "The electronic dealer finance platform is a premium product from SBI through which we shall partner the growth ambitions of Bajaj Auto by providing the best-in-class customer experience to their dealers."

Under the agreement a cash credit facility, ranging between Rs 25 lakh - Rs 5 crore, will be made available to Bajaj Auto dealers who predominantly fall in the small and medium enterprise (SME) category for State Bank of India.

The loans will be sanctioned and disbursed subject to necessary approvals at a competitive interest rate, the company said in a statement.

The inventory finance innovation comes after the company recorded its highest-ever sales of more than 2.4 million motorcycles during 2010-2011.

"Timely availability of finance is a crucial component in the scheme of things. Our domestic bike sales have grown at 35 per cent last year. With new models and variants being launched and increased acceptance of existing models we will need to ensure adequate working capital for dealers", Sridhar said.

Bajaj Auto has ambitious growth plans this year as well.

Hence, higher inventories at the dealer level as well as secondary network are expected during this fiscal, the company said, adding that higher inventories would mean higher working capital requirements at the dealer level.

"Considering these requirements we have taken proactive steps to provide critical resources, including financing through SBI, to our dealers," Sridhar added.