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The agricultural equipment finance market size is estimated to grow at a CAGR of 5.41% between 2022 and 2027. The market size is forecast to increase by USD 156.65 billion. The growth of the market depends on several factors such as quick and easy access to credit, an increase in farm equipment renting, and an increase in government initiatives.
This agricultural equipment finance market report extensively covers market segmentation by 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). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Quick and easy access to credit is the key factor driving the growth of the market. If the request is successfully received by the financial institution, it may take several additional weeks before the credit is authorized and transferred. Many banks also have guidelines that encourage them to provide loans to farmers with the support of the government. Additionally, alternative financing targets these businesses by providing them with quick and easy access to credit.
Furthermore, the development of online financial platforms has also facilitated access to capital for those in the agricultural sector. Agricultural participants such as farmers, contractors, and dealers can apply for credit on these platforms within minutes of registration and funds will be credited immediately once the application is approved. Therefore, quick and easy access to loans will drive the growth of the global agricultural equipment financing market during the forecast period.
Financing to support women in the agricultural sector is the primary trend shaping the growth of the market. To encourage women's empowerment, governments, and NGOs (as part of social activism) in countries such as India, China, and Africa provide loans at low interest rates and substantial subsidies for purchasing or renting agricultural equipment. Securities such as tangible assets can be given by women as collateral and loans can be made in their names.
Moreover, property mortgage loans are one of the preferred options for agricultural equipment buyers, especially women. Many asset-based lenders focus on collateral quality rather than the buyer's credit score. Growing initiatives to empower women in developing countries will boost the growth of the global agricultural equipment finance market during the forecast period.
Costlier bank lending rates are a challenge that affects the growth of the market. Overall economic globalization has led to changes in the supply and demand of financial products. Bank finance has been considered the cheapest means of financing in the past decade; However, since then, banks have changed their strategies to increase market liquidity. The concept of capital plus interest has changed the general scenario of traditional finance.
Moreover, documentation, third-party processes, processing, and fees are some of the aspects involved in loans and lines of credit. Thus, in some cases, financial institutions reduce their customers' investment portfolios by requiring borrowers to repay their credit line balances at higher interest rates. These factors have encouraged farmers to rent equipment instead of buying their own. This, in turn, will impede the market growth during the forecast period.
The market research report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Agricultural Equipment Finance Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The lease segment is estimated to witness significant growth during the forecast period. The use of rental equipment is an evolving trend in regions such as North America, Western Europe, and APAC. This is due to the cost-effectiveness of equipment leasing and the pay-per-use choice offered by agricultural equipment lenders. This helps agricultural participants save costs and purchase advanced equipment according to their needs.
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The lease segment was the largest segment and was valued at USD 327.91 billion in 2017. Many national governments, such as the US and India, offer tax flexibility for equipment purchases or equipment lease payments. With equipment leasing, buyers can also pledge the equipment as collateral. Payments made by forward buyers are fully tax-deductible and lower than equipment loans or lines of credit. Such initiatives by the government are driving the growth of this segment. Therefore, these factors are expected to drive the growth of the lease segment in the global agricultural equipment finance market during the forecast period.
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APAC is estimated to contribute 36% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. APAC is an attractive market for agricultural equipment finance sellers. This is due to the high growth potential and noteworthy contribution of the agricultural sector to GDP in countries such as India, China, and Bangladesh.
Moreover, Japan, India, Australia, and China are the main markets in the region. Economic growth in these countries positively affects the development of the agricultural sector. They also have many government initiatives to develop agriculture. Additionally, financial companies are adopting cloud, mobile wallet, and blockchain technology to fundamentally redefine their business and operating models. Financial companies are increasingly investing in technology venture capital, incubators, and startups. Hence, such factors are expected to drive market growth in the region during the forecast period.
The outbreak of COVID-19 in 2020 had a negative impact on the agricultural equipment finance market in APAC. Farmers in the region have undersized access to new agricultural equipment. This is favorable for the agricultural equipment financing market in the region because farmers cannot buy new agricultural equipment and must depend on rental service providers. Additionally, in May 2021, Tractors and Farm Equipment Ltd., a leading supplier in the market, announced a free tractor rental program to support the Tamil Nadu State. Farmers can rent or hire tractors or agricultural equipment using the TAFE digital platform or the Uzhavan government app. Such initiatives have fueled regional market growth, even amid the pandemic. Furthermore, with continuous initiatives taken by regional authorities and market participants, the regional market will continue to witness growth during the forecast period.
The agricultural equipment finance market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
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Agricultural Equipment Finance Market Scope |
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Report Coverage |
Details |
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Page number |
185 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 5.41% |
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Market growth 2023-2027 |
USD 156.65 billion |
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Market structure |
Fragmented |
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YoY growth 2022-2023(%) |
4.74 |
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Regional analysis |
APAC, North America, Europe, South America, and Middle East and Africa |
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Performing market contribution |
APAC at 36% |
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Key countries |
US, China, India, UK, and Germany |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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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. |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Product
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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