Hello Tractor, Heifer International unveils pay-as-you-go tractor funding for local farmers in Nigeria.
Hello Tractor, a Nigerian tractor-booking website, has received $1 million in funding from Heifer International to give tractor loans that may be repaid with cash generated by leasing the tractors to local farmers.
The “Pay-As-You-Go (PAYG) Tractor Financing for Increased Agricultural Productivity in Nigeria” program has already enabled tractor purchases in Nasarrawa, Abuja, and Enugu states.
Thousands of smallholder farmers could benefit from these purchases, which will be made possible by the growing popularity of the Hello Tractor leasing platform. Hello Tractor, dubbed “Uber for tractors,” provides software and tracking devices that enable farmers to schedule tractor services from local tractor owners using a mobile phone app.
“The pay-as-you-go model enables funding for entrepreneurs who want to generate jobs by capitalizing on the demand for tractor services on African farms but don’t have traditional forms of collateral,” said Adesuwa Ifedi, Heifer International’s Senior Vice President of Africa Programs. “It’s a method to get finance into the hands of young people who have good business skills and can help revolutionize African agriculture but are frequently disregarded by private equity investors.”
Tractors are found in around 200 square kilometers of agricultural land around the world, but only about 27 in Sub-Saharan Africa.
In a location where smallholder farming is the primary source of income, this is an example of a mechanization gap that has a significant impact on farm production and local economy.
Hello Tractor is one of a spate of new agritech companies cropping up throughout the continent to take advantage of these and other farming difficulties. While over $5 billion has been invested in African tech startups by private equity firms and big impact investors, only a small part of the money goes to young agritech entrepreneurs.
Ifedi noted that Heifer International is stepping up to demonstrate the potential of agritech investments to create jobs for Africa’s ten to twelve million young people who enter the workforce each year – in an economy that, according to the African Development Bank, generates only three million formal jobs annually.
Heifer International launched the AYuTe Africa Challenge in 2021, which gives cash incentives to Africa’s most outstanding young agritech entrepreneurs every year. It also supports Heifer International’s goal of assisting more than six million African farmers to obtain a sustainable living income by 2030.
Hello Tractor was one of two firms granted $1.5 million USD in the inaugural AYuTe Africa Challenge. Hello Tractor was able to finance 17 tractors for 17 entrepreneurs in three countries thanks to the prize.
Heifer’s additional investments in its PAYG product, announced today, will provide more entrepreneurs and smallholder farmers with cheap tractor services. As a result, farm production, employment, food security, and farmer livelihoods may all benefit.
“We created the PAYG program to enable tractor ownership—and the steady income these machines can provide—a reality for entrepreneurs who couldn’t access financing through traditional channels,” said Jehiel Oliver, Hello Tractor’s founder and CEO. “We look at how much money a tractor owner can make, not how much collateral they can put up.”
Partnering with Heifer “allows us to offer innovative finance to people who were previously labeled ‘unbankable,’ while also providing access to technology that has the potential to improve the earnings of millions of smallholder farmers across Africa,” according to Oliver.
