Nigeria’s Hello Tractor has secured $1million in financing from Heifer International for its Pay-As-You-Go tractor financing program. The investment is intended to be used to provide loans for tractor purchases—loans that can be repaid from revenues earned by leasing them to local farmers.
Known as the “Uber for Tractors”, Hello Tractor connects tractor owners with small-scale farmers in need of tractor services. It also offers software and tracking devices that allow farmers to book tractor services from local tractor owners via a mobile phone app. The benefit for farmers is that they get a critical service formerly unavailable to them, and owners see a fleet optimization opportunity that also minimizes fuel theft and fraud.
Its program, “Pay-As-You-Go (PAYG) Tractor Financing for Increased Agricultural Productivity in Nigeria,” already has enabled tractor purchases in the states of Nasarrawa, Abuja and Enugu. These purchases could make tractors accessible to thousands of smallholder farmers via the increasingly popular Hello Tractor leasing platform.
Founded by Jehiel Oliver in 2014 , Hello Tractor currently serves over 500,000 small farmers across Africa with over 3,000 tractor and combine owners.
According to Adesuwa Ifedi, Senior Vice President of Africa Programs at Heifer International, “The pay-as-you go model provides financing for entrepreneurs who want to create jobs by capitalizing on the demand for tractor services on Africa 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.”
Globally there are roughly 200 tractors per 100 square kilometers of agriculture lands, but in sub-Saharan Africa, there are only about 27. This is illustrative of a mechanization deficit that has a significant impact on farm productivity and local economies in a region where most people depend on smallholder farming for income. 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.
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 enter the workforce every year in Africa– and in an economy that, according to the African Development Bank, generates only three million formal jobs annually.
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.
“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,” said Jehiel Oliver, founder and CEO of Hello Tractor. “We look at the revenue tractor owners can generate, not how much collateral they can pledge.”
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.”
