The collaboration offers finance limits up to ₹5 crore, a 105-day credit period, and digital financial tools, streamlining inventory management and working capital for Mahindra Tractors’ dealers to support business growth.
24 Dec 2024 | 5687 Views | By Autocar Professional Bureau
Mahindra Tractors, part of Mahindra & Mahindra Ltd.'s Farm Equipment Sector, has signed a Memorandum of Understanding (MoU) with Punjab National Bank (PNB) to offer Channel Finance solutions to its dealers. This collaboration aims to improve working capital management, streamline inventory, and support business growth for the dealer network.
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Mahindra Tractors, part of Mahindra & Mahindra Ltd.'s Farm Equipment Sector, has signed a Memorandum of Understanding (MoU) with Punjab National Bank (PNB) to offer Channel Finance solutions to its dealers. This collaboration aims to improve working capital management, streamline inventory, and support business growth for the dealer network.
Under the agreement, Mahindra Tractors' dealers with a business history of over one year are eligible for a finance limit of up to ₹5 crore. The limit is determined based on 105 days of sales, offering a credit period of 105 days along with a 15-day grace period. The program provides 100% funding of Mahindra & Mahindra invoices without any margin requirements, ensuring dealers have access to the necessary funds to manage their operations.
The financing solutions will be provided through PNB's digital Financial Supply Chain Management (FSCM) module. This platform facilitates streamlined processes with competitive interest rates and simplified documentation, enabling dealers to efficiently manage their finances while focusing on customer service.
Hemant Sikka, President of the Farm Equipment Sector at Mahindra & Mahindra Ltd., expressed confidence in the partnership, highlighting that the collaboration would support dealers in meeting their unique business needs, enhancing working capital management, and improving operational efficiency.
The agreement also addresses peak season financial requirements, allowing dealers to manage higher demand periods effectively. Firoz Hasnain, Chief General Manager and Zonal Head of PNB's Mumbai Zone, emphasised the bank's commitment to providing tailored financial solutions that support the agricultural sector and MSMEs.
Many Mahindra dealers already maintain financial relationships with PNB, utilising products such as cash credit limits, bank guarantees, and current accounts. The existing partnerships are expected to ensure a smooth transition for dealers choosing to adopt PNB's channel finance solutions. Additionally, dealers currently working with other financial institutions will have the option to transfer their financing arrangements to PNB through a balance takeover.