Mahindra & Mahindra Ltd. (M&M Ltd.) has signed a Memorandum of Understanding (MoU) with DBS Bank India to introduce a first-of-its-kind sustainability-linked dealer financing programme. The initiative marks the first time an Indian automotive manufacturer has tied wholesale supply-chain finance rates to environmental performance.
Under the new framework, authorised Mahindra dealerships will receive preferential interest rates on inventory loans used to purchase passenger and commercial vehicles, provided they meet specific sustainability benchmarks aligned with M&M’s Green Dealership Program.
Automotive dealerships conventionally secure working capital from financial institutions to purchase vehicle stock from manufacturers before retail sale. The joint M&M and DBS structure introduces a ranking matrix that evaluates a dealership’s physical operations against a rigorous set of environmental, social, and governance (ESG) metrics.
The commercial incentives and tier-based interest rate reductions are tied to verified progress across several key operational areas:
- Reductions in baseline greenhouse gas emissions and total water consumption.
- The integration of rooftop solar or alternative renewable energy sources.
- The installation of rainwater harvesting systems and responsible waste management protocols.
- The deployment of public electric vehicle (EV) charging infrastructure at the dealership site.
- Meeting specific sales volume targets for electric SUVs (eSUVs).
The initiative is designed to tackle Scope 3 value-chain emissions, which typically represent the largest portion of an automotive company’s total carbon footprint but remain the most difficult to regulate.
“The launch of our sustainability-linked dealer financing programme with DBS Bank India comes as India stands at a critical juncture in its sustainability journey,” said Nalinikanth Gollagunta, Chief Executive Officer of the Automotive Division at Mahindra & Mahindra Ltd. “The launch of this financing program will enable us to step up the breadth of our decarbonisation efforts, bring our dealerships into the fold and drive a reduction in Scope 3 emissions.”
Divyesh Dalal, Managing Director and Country Head of Global Transaction Services at DBS Bank India, emphasised that the facility provides a structural solution to network-wide decarbonisation. “Our new financing program goes beyond the balance sheet, providing the practical tools needed to decarbonise their dealer network at scale,” Dalal noted.
Terence Yew Tiek Yong, Managing Director and Group Head of Corporate Sales & Solutioning at DBS Bank, highlighted the cross-functional nature of the partnership. “DBS is supporting Mahindra & Mahindra by incentivising their dealer network to promote EV adoption in the community and enable higher ESG standards of operations and investment,” Yew said. “We are inspired by the active collaboration across Mahindra & Mahindra’s organisational functions, from Production to Sustainability, from Channels to Finance, to take the wheel in climate adaptation.”
