A not-for-profit organisation, Heifer International, has announced that it is investing $1m in the tractor booking platform, Hello Tractor.
In a statement, Vice President of Africa Programmes at Heifer International, Adesuwa Ifedi, said that the platform would provide loans for tractor purchases – loans that could be repaid from revenues earned by leasing them to local farmers.
Ifedi said that the platform would make tractors accessible to thousands of small-holder farmers.
“The program, Pay-As-You-Go tractor financing, has enabled tractor purchases in Abuja, Nasarrawa, and Enugu. These purchases could make tractors accessible to thousands of smallholder farmers via the increasingly popular Hello Tractor leasing platform.”https://imasdk.googleapis.com/js/core/bridge3.512.0_en.html#goog_1679230205
Explaining further, Ifedi said that the programme would also be financing for entrepreneurs who would want to create jobs by capitalising on the demand for tractor services on Africa farms.
“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 is 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.”
According to Ifedi, Sub-Saharan Africa has a mechanisation gap, which has a substantial influence on farm output.
“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 mechanisation 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 was stepping in to demonstrate the potential of agritech investments to generate jobs for the 10 -12 million young people entering the workforce every year in Africa.
Also speaking, the founder and Chief Executive Officer of Hello Tractor, Jehiel Oliver, said: “We developed the PAYG programme 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.”
Oliver further said, “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,” he concluded.