Mahindra Tractors has signed a Memorandum of Understanding (MoU) with Punjab National Bank (PNB) to provide tailored channel finance solutions for its dealers. The partnership is designed to support Mahindra’s dealer network by improving working capital management, streamlining inventory, and addressing seasonal financial demands.
The finance program under the agreement offers eligible dealers, with a business history of over one year, a credit limit of up to INR 5 crore based on a 105-day sales period, with an additional 15-day grace period. Dealers will benefit from 100% funding of Mahindra & Mahindra invoices without any margin requirements. This initiative also includes competitive interest rates and simplified documentation processes, ensuring dealers can manage their finances with ease while focusing 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, enhancing the speed and efficiency of transactions. It also accommodates the peak-season requirements of Mahindra’s dealers, enabling them to manage high-demand periods effectively while optimising 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 optimise 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 is expected to ensure a seamless transition for those opting to move their channel finance arrangements to PNB. Dealers with current financing through other institutions will also have the option to transfer their financing to PNB through a balance takeover facility.
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