Construction Equipment Financing Sector: Despite Odds Staying Afloat

Instead of being bogged down by the economic stupor, CE Financiers are reinventing their strategies to maintain profitability

Perhaps, what makes Construction and Infrastructure unique is the symbiotic nature of these sectors wherein fortunes of all the stakeholders are intertwined. If one flourishes, the others also reap rewards, and if one faces hardships, the others also flounder. For the past couple of years or so, the sentiment in construction and allied activities has been low and it has impacted Construction Equipment (CE) Manufacturers, who have found it difficult to keep the order books full; Contractors and Developers, whose projects have been inordinately delayed; and CE Financiers, who have had a tough time in dealing with cash-strapped borrowers. In order to maintain profitability, financiers – NBFCs and banks-had resorted to a very cautious approach wherein new clientele was not established and loan rates were increased to mitigate higher credit risks.