Mahindra Tractors has entered into a Memorandum of Understanding (MoU) with Punjab National Bank (PNB) to offer customized channel finance solutions for its dealers. This partnership aims to support Mahindra’s dealer network by enhancing working capital management, optimizing inventory, and addressing seasonal financial needs.
The finance program outlined in the agreement provides eligible dealers, who have been in business for over one year, with a credit limit of up to INR 5 crore based on a 105-day sales period, plus an additional 15 grace period. Dealers will benefit from 100% funding of Mahindra & Mahindra invoices without any margin requirements. This initiative also features competitive interest rates and simplified documentation processes, allowing dealers to manage their finances while concentrating on their core business operations.
Hemant Sikka, President of the Farm Equipment Sector at Mahindra & Mahindra Ltd, stated “This collaboration with Punjab National Bank will provide comprehensive financial solutions that align with the specific needs of our dealers. By improving working capital access, we aim to drive efficiency and support our dealers in better serving the farming community.”
The financial program is facilitated through PNB’s fully digital Financial Supply Chain Management (FSCM) module, which the speed and of transactions. It also accommodates peak-season requirements of Mahindra’s dealers, enabling them to manage high-demand periods optimizing cash flow.
Firoz Hasnain, Chief General Manager and Zonal Head of PNB’s Mumbai Zone, added “The initiative will enhance operational efficiency, streamline inventory management, and optimize cash flow for Mahindra dealers.”
Many of Mahindra’s dealers already hold financial products with PNB, including cash credit limits and bank guarantees. This existing relationship expected to ensure a seamless transition for those opting to move their channel finance arrangements to PNB. Dealers currently financing through other institutions will also have the option to transfer their financing to PNB through a balance takeover facility.