Adedapo Adesanya
By Adedapo Adesanya
Heifer International, in a partnership with tractor booking platform, Hello Tractor, has announced a $1 million investment to provide loans for tractor purchases, which can then be repaid from revenues earned by leasing them to local farmers.
This is part of the efforts of the company to innovative ways to generate agribusiness opportunities for young African entrepreneurs.
Globally, there are roughly 200 tractors per 100 square kilometres of agricultural lands but in sub-Saharan Africa, there are only about 27 and the partnership programme, Pay-As-You-Go (PAYG) Tractor Financing for Increased Agricultural Productivity in Nigeria, it is has enabled tractor purchases in the states of Nasarrawa, Abuja and Enugu.
The loans for tractor purchases could make the farm input accessible to thousands of smallholder farmers via the increasingly popular Hello Tractor leasing platform. Sometimes referred to as Uber for tractors, Hello Tractor offers software and tracking devices that allow farmers to book tractor services from local tractor owners via a mobile phone app.
Speaking on this, Mrs Adesuwa Ifedi, Senior Vice President of Africa Programs at Heifer International said, “The Pay-As-You-Go model provides financing for entrepreneurs who want to create jobs by capitalizing on the demand for tractor services on African farms, but who lack traditional forms of collateral.
“It’s a way to unlock capital for youth who have strong business skills that can help transform African agriculture but are often overlooked by private equity investors.”
Mrs Ifedi noted that Heifer International is stepping into the breach to demonstrate the potential of agritech investments to generate jobs for the ten and twelve million young people entering the workforce every year in Africa.
This is in continuation of what the company has been doing. In 2021, Heifer International created the AYuTe Africa Challenge, which awards cash grants annually to the most promising young agritech innovators across Africa.
It also supports Heifer’s goal of helping more than six million African farmers earn a sustainable living income by 2030.
The inaugural AYuTe Africa Challenge awarded a total of $1.5 million USD to two companies, one of which was Hello Tractor. The award allowed Hello Tractor to finance 17 tractors for 17 entrepreneurs in three countries.
Adding his input, Mr Jehiel Oliver, founder and CEO of Hello Tractor said Heifer’s new investments for the company’s PAYG product will give more entrepreneurs and smallholder farmers access to tractor services at an affordable rate, and that in turn can boost farm productivity, employment, food security and farmer livelihoods.
“We developed the PAYG program to make tractor ownership—and the reliable income these machines can bring—a reality for entrepreneurs who find it impossible to get credit through normal channels.
“We look at the revenue tractor owners can generate, not how much collateral they can pledge.”
Mr Oliver said that partnering with Heifer “enables us to extend innovative financing to people who were previously considered ‘unbankable,’ while increasing access to technology that has the potential to improve the incomes of millions of smallholder farmers across Africa.”
Hello Tractor is one of many new agritech start-ups emerging across the continent that are finding business opportunities in addressing this and other farming challenges. However, while private equity groups and large impact investors have provided more than $5 billion for tech startups in Africa, very little of that financing has gone to young agritech entrepreneurs.
