Maharashtra Tractor Financing Market

Market Overview:

The Maharashtra Tractor Financing Market is anticipated to grow significantly in the coming years owing to factors affecting the market including Increased Tractor Sales and hassle-free Financing Process. Banks and NBFCs are the major finance providers in the Maharashtra Tractor Financing Market. Additionally, growing strategic partnerships among the FPOs, Agritech Companies and Banks for market expansion is further accelerating the industry.

NBFCs are leading the market because of their easier application procedures, shorter approval times, and more flexible repayment plans. L&T Finance, Mahindra Finance, and Chola enter life are some of the major NBFC providers in the market.

In Maharashtra, there are about 20 original equipment manufacturers (OEMs), and about 40 financial institutions.  Mahindra dominates the Maharashtra Tractor Financing Market with more than 40% share. Sonalika and John Deere also have significant market share in the industry. Additionally, the ecosystem is further supported by government regulatory bodies including the Department of agriculture and Welfare.

Maharashtra Tractor Financing Market Analysis

• Due to their use in both basic farming operations and heavy load hauling, the majority of tractors sold in Maharashtra had less than 45 horsepower.
• Banks offer cheap interest rates, but their procedures are lengthy and complicated, with little reduction in overhead costs. Due to the involvement of the IT team and credit, the process is lengthy. Adivasi and OBC groups are more inclined to use banks to finance their government subsidies.
• The reason NBFCs are market leaders is because they have less strict eligibility requirements, such as a less strict requirement for land ownership or income data in papers.
• Occasionally, they approve the file based on a review of the reputation of the community and the background of blood relatives. Furthermore, overhead expenses are waived off or lowered to approximately 1.5%.
• Sales of tractors surged in 2021 during the COVID-19 pandemic because farming activities persisted throughout that time. The largest tractor sales were recorded in 2023 due to an increase in minimum support prices (MSP), which raised agricultural revenue.
• Customers view price, tractor model, and local brand image as essential when purchasing tractors. In Maharashtra, peer influence is a major factor while purchasing a tractor.

Key Trends by Market Segment:

By Type of Tractors: The Maharashtra Tractor Financing Market is classified into two major categories: New Tractors and Used Tractors. New Tractors dominate the Maharashtra Tractor Financing Market with 72% of the market share followed by Used Tractors. New tractors are dominating the market as farmers generally give preference to new tractors and new tractors are far more expensive than used tractors, thus this segment is leading the industry.

By HP Category: Based on the HP Category, the Maharashtra Tractor Financing Market is categorized into three main categories: 55 HP. 45-55 HP is the single largest HP Category in the  Maharashtra Tractor Financing market with a market share of 45% followed by 55 HP. 45-55 HP is leading the market as this category of target is considered best for the farming operations along with hauling heavy loads.

By Type of Region: The Maharashtra Tractor Financing is divided into six major regions (divisions): Pune, Aurangabad, Nashik, Amaravati, Nagpur, and Konkan. Among the six regions of the Maharashtra Tractor Financing market. With 29% of the market share Pune region is ruling the market followed by Aurangabad and Nashik. Solapur, Sangli, and Srirampur are the top three contributing districts in the Pune division in tractor sales.

Competitive Landscape:

Major Players in The Maharashtra Tractor Financing Market

• Mahindra is leading the Maharashtra Tractor Financing Market with more than 40% of the market share and has a network of Maharashtra Tractor Financing Market.
• In 2023, Tractor loans of about INR 2,700 crores were successfully disbursed by Mahindra Finance owing to flexible repayment options and a strong customer retention rate.
• SBI and Axis Bank are the leading banks that are providing tractor finance to the farmers, POs & Associations, and Construction & Logistics Companies are present in the Maharashtra Market demanding different types of Tractors at minimal interest rates.
• NBFCs such as Cholamandalam and L&T Finance are dominating the NBFC finance segment in the market. Overall, NBFC attracts a large segment of creditors for tractor finance since their procedure is far more straightforward than banks.

Recent Developments:

• In 2023 Maharashtra to increase mechanization in the agricultural sector government launched Tractor Anudan Yojana. Under the scheme, farmers are provided subsidies on agricultural implements and machinery from the Government of Maharashtra through this scheme. Farmers will be provided with Tractors, Power Tillers, Bullock bullock-powered implements, Processing Sets, Harvesting Western Technology etc.
• In Oct-Nov 2022, Mahindra Finance launched the Shubh Utsav Festive Campaign to increase awareness & promote product offerings during the festive season. The campaign involved Below-the-line (BTL) activations at car & tractor dealerships & marketplaces.
• Recently Mini Tractor Anudan Yojana was launched by Maharashtra’s government for economically disadvantaged farmers. This scheme provides them the opportunity to acquire mini tractors at a subsidized rate, with the government offering a 90% subsidy.