Global Agricultural Equipment Finance Market to Post More than 4% CAGR
APR 12, 2019 - 6:50 am
The global agricultural equipment finance market is expected to post a CAGR of more than 4% during the period 2019-2023, according to the latest market research report by Technavio.
The popularity of equipment rental is increasing significantly worldwide owing to the convenience of using equipment as per requirement, with no concerns about procession costs, devaluation, or repair and maintenance charges. Agricultural equipment renting has been a large-scale business in the U.S., the UK, and some European nations for a long period.
The most significant growth in the agricultural equipment rental market will arise from developing countries such as India and Indonesia during the forecast period. The increasing number of agricultural equipment rental providers will encourage finance companies to increase their funding for well-maintained quality equipment. These developments will fuel the growth of the agricultural equipment finance market during the forecast period.
As per Technavio, the replacement of outdated agricultural equipment with advanced equipment will have a positive impact on the market and contribute to its growth significantly over the forecast period. This global agricultural equipment finance market 2019-2023 research report also analyzes other important trends and market drivers that will affect market growth over 2019-2023.
Advances in the technology used by financial institutions
The agricultural equipment finance market has been witnessing the emergence of various technologies in recent years. This is helping to achieve a higher level of automation and a certain level of standardization in agricultural equipment financing. For instance, the emergence of blockchain technology is assisting companies in eliminating the need for physical documents and making the process fast and more transparent for equipment financing parties.
It also substantially reduces the time and cost for loan issuance, as well as for any buyer waivers or amendments made due to discrepancies. The blockchain technology also offers real-time transparency of data related to all aspects of a loan transaction to each party involved. Such technological advancements will fuel the growth of the agricultural equipment finance market.
“Several governments across the world are taking initiatives to advance the agricultural sector. For instance, the U.S. Department of Agriculture (USDA) promotes the use of advanced equipment in farming in the US. As a result, farming equipment is available for farmers at lower rates owing to government subsidies.
This is encouraging farmers to adopt advanced machinery such as power tillers, sprinklers, tractors, and power threshers in the farming process at a small initial investment, thus, driving market’s growth,” says a senior research analyst at Technavio.
Global Agricultural equipment finance market: Segmentation analysis
This market research report segments the global Agricultural equipment finance market by type (lease, loan, and line of credit) and geographic regions (North America, Europe, APAC, South America, and MEA).
The lease segment held the largest agricultural equipment finance market share in 2018. This segment is expected to remain the major segment throughout the forecast period, mainly because financing companies are providing options to borrowers based on the residual fair market value. This allows borrowers to make payments at the end of the maturity period if the borrower wants to own the equipment.
The North America region led the market in 2018 with a market share of more than 31%, followed by Europe, APAC, South America, and MEA respectively. The market growth in North America can be attributed to the expanding agriculture industry with some of the world’s most advanced economies in the region that are pioneers in agricultural production and consumption.
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