NEW YORK, Nov. 6, 2024 /PRNewswire/ -- Report with the AI impact on market trends - The global agricultural equipment finance market size is estimated to grow by USD 182.8 billion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of 6% during the forecast period. Quick and easy access to credit is driving market growth, with a trend towards replacement of outdated agricultural equipment with advanced equipment. However, turbulent economic and political environment poses a challenge.Key market players include Adani Group, AGCO Corp., Agricultural Bank of China Ltd., Argo Tractors SpA, Barclays PLC, BlackRock Inc., BNP Paribas SA, Citigroup Inc., Deere and Co., ICICI Bank Ltd., IDFC FIRST Bank Ltd., IndusInd Bank Ltd., JPMorgan Chase and Co., Key Corp., Larsen and Toubro Ltd., Mahindra and Mahindra Ltd., Rabobank Group, State Bank of India, The Capital Group Companies Inc., and Wells Fargo and Co..
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Forecast period |
2024-2028 |
Base Year |
2023 |
Historic Data |
2018 - 2022 |
Segment Covered |
Type (Lease, Loan, and Line of credit), Product (Tractors, Harvesters, Haying equipment, and Others), and Geography (APAC, North America, Europe, South America, and Middle East and Africa) |
Region Covered |
APAC, North America, Europe, South America, and Middle East and Africa |
Key companies profiled |
Adani Group, AGCO Corp., Agricultural Bank of China Ltd., Argo Tractors SpA, Barclays PLC, BlackRock Inc., BNP Paribas SA, Citigroup Inc., Deere and Co., ICICI Bank Ltd., IDFC FIRST Bank Ltd., IndusInd Bank Ltd., JPMorgan Chase and Co., Key Corp., Larsen and Toubro Ltd., Mahindra and Mahindra Ltd., Rabobank Group, State Bank of India, The Capital Group Companies Inc., and Wells Fargo and Co. |
Key Market Trends Fueling Growth
Agricultural equipment plays a crucial role in maintaining efficiency and productivity in farming operations. However, as equipment depreciates over time, the need for replacement arises. The replacement time frame varies depending on the equipment's usage and risk of obsolescence. For instance, forklifts and tractors require regular maintenance and may need to be replaced more frequently than other equipment. In some countries, such as India, Bangladesh, and Pakistan, replacement policies and emission regulations are less stringent, leading to longer equipment usage. Advanced agricultural equipment is increasingly being adopted to enhance crop productivity. Equipment finance companies provide customized solutions to help agri-businesses manage the high investment costs. The global agricultural equipment finance market is witnessing continuous innovation, driven by the demand for more efficient and effective farming solutions. Small- and mid-sized farmers are seeking advanced equipment to gain a competitive edge. The high initial investment required for upgrading agricultural equipment presents a challenge, but the long-term benefits, including increased automation, output, and productivity, make it a worthwhile investment. Manufacturers and financial institutions must collaborate to provide more customized financing solutions to farmers. The feasibility and advantage of these investments are fueling innovations in the global agricultural equipment finance market, driving its growth during the forecast period.
The Agricultural Equipment Finance Market is experiencing significant trends that are shaping the industry. Credit scoring is becoming more important for finance companies to assess borrower risk. Fintech integration is streamlining the loan application process. Eco-friendly equipment is a growing focus, with demand for irrigation and planting equipment. Farm size influences financing options, with loans, leases, and lines of credit available for small, medium, and large farms. Prime, non-prime, and subprime borrowers have varying financing needs. Investment in agriculture and food production demand continue to drive the market. Online finance platforms offer quick loan approval, while blockchain technology ensures secure transactions. Agricultural equipment rental and alternative finance options are also gaining popularity. Finance companies offer financing programs for farm equipment loans and agricultural enterprise. Farm loan waivers and unsecured loans are available for those in need. Farm efficiency and contract farming are key considerations for financing agricultural machinery.
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Market Challenges
- The agricultural equipment finance market is currently facing challenges due to economic and political instability in various regions, leading to limited capital flow and exchange rate volatility in the banking sector. Geopolitical tensions are causing trade disruptions and volatile market growth in emerging nations, while economic recovery in Western nations remains slow. Credit risk management is crucial when granting agricultural loans, and financiers assess applicants based on financial history, loan repayment ability, collateral, and management profile. However, many farmers lack sufficient collateral to cover production input costs, making it difficult for them to obtain traditional loans or pay high interest rates. In countries like Zambia, farmers cannot use agricultural land as collateral due to government ownership, making loan recovery challenging. These factors hinder the growth of the global agricultural equipment finance market. Banks must make provisions and adapt to market events to minimize disruption and ensure proper internal processes and controls.
- The Agricultural Equipment Finance Market is experiencing significant changes due to various challenges. Online finance platforms and blockchain technology are transforming the way farmers access financing for equipment acquisition. Quick loan approval is essential for farmers to purchase essential agricultural machinery like tractors, combines, harvesters, planters, utility vehicles, and drones for farm mechanization. Finance companies face increased credit demand, requiring alternative financing options such as unsecured loans and agricultural enterprise financing programs. Farm loan waivers and farm efficiency initiatives also impact financing decisions. Lease and tractor financing, crop loans, and Kisan Credit Cards (KCC) offer flexible repayment terms and seasonal payment options. Farmers can also consider equipment leasing and specialized loan programs. Agricultural productivity, precision agriculture, and crop production are key factors driving the need for financing. Financial institutions offer agricultural insurance, smart combine harvesters, and farming equipment loans to support farmers. Farmers must evaluate financing options carefully to optimize their operations and improve agricultural productivity.
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Segment Overview
This agricultural equipment finance market report extensively covers market segmentation by
- Type
- 1.1 Lease
- 1.2 Loan
- 1.3 Line of credit
- Product
- 2.1 Tractors
- 2.2 Harvesters
- 2.3 Haying equipment
- 2.4 Others
- Geography
- 3.1 APAC
- 3.2 North America
- 3.3 Europe
- 3.4 South America
- 3.5 Middle East and Africa
1.1 Lease- The agricultural equipment finance market's lease segment held the largest market share in 2023 and is projected to continue leading throughout the forecast period. Leasing offers borrowers the flexibility to pay for equipment usage instead of ownership. Financing companies determine payments based on the residual fair market value, allowing borrowers to own the equipment at maturity or return it. Rental equipment's cost-effectiveness and pay-per-use model are driving trends in North America, Western Europe, and APAC. Equipment leasing requires less paperwork than loans or lines of credit and offers tax benefits in countries like the US and India. Easy credit approvals and fast funding further boost the lease segment's growth.
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Research Analysis
The Agricultural Equipment Finance Market is experiencing significant growth due to the increasing trend of farm mechanization and the adoption of advanced technologies like precision agriculture and drones in large-scale farming. Online finance platforms are revolutionizing the industry by providing quick loan approvals and real-time information transparency, making it easier for farmers to acquire the necessary equipment for their agricultural enterprise. Unsecured loans and alternative finance options are also becoming popular, especially among small-scale farmers. Farm loan waivers and equipment rental are other financing solutions that are gaining traction in the market. The demand for agricultural machinery such as tractors, combines, harvesters, planters, utility vehicles, and other equipment is on the rise, leading to an increased need for equipment finance. The Farm Service Agency (FSA) and other finance companies are playing a crucial role in facilitating equipment acquisition for farmers. Blockchain technology is expected to further disrupt the market by providing secure and transparent transactions. Overall, the Agricultural Equipment Finance Market is set to witness growth in the coming years.
Market Research Overview
The Agricultural Equipment Finance Market is witnessing significant growth due to the increasing demand for financing solutions for agricultural machinery and equipment acquisition. Online finance platforms are revolutionizing the industry by offering quick loan approvals and alternative finance options for farmers. Blockchain technology is being integrated to ensure transparency and security in financial transactions. Agricultural equipment rental is also gaining popularity, providing farmers with flexible repayment terms and seasonal payment options. Finance companies offer various financing programs for farm loan waivers, utility vehicles, tractors, combines, harvesters, planters, and other equipment. Farm size and borrower creditworthiness determine the type of financing options available, including unsecured loans, specialized loan programs, and lines of credit. The integration of fintech and data analytics in agricultural financing enables credit scoring and automated systems for crop monitoring and farm efficiency assessment. With the increasing investment in agriculture and food production demand, eco-friendly equipment and precision agriculture technologies are also being financed through equipment leasing and crop loans. Farmers can now access various financing solutions, including the Kisan Credit Card (KCC), crop insurance, and agricultural productivity enhancement programs, to boost their farm mechanization and productivity.
Table of Contents:
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation
- Type
- Lease
- Loan
- Line Of Credit
- Product
- Tractors
- Harvesters
- Haying Equipment
- Others
- Geography
- APAC
- North America
- Europe
- South America
- Middle East And Africa
7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix
About Technavio
Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.
With over 500 specialized analysts, Technavio's report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio's comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.
Contacts
Technavio Research
Jesse Maida
Media & Marketing Executive
US: +1 844 364 1100
UK: +44 203 893 3200
Email: [email protected]
Website: www.technavio.com/
SOURCE Technavio
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