A new report has spotlighted a successful financing model for agricultural mechanization among smallholder farmers in Africa. Released on April 29 in Nairobi, the 2024 Aceli Financial Benchmarking Report highlights the partnership between Hello Tractor and Heifer International as a scalable solution to unlocking agricultural finance in rural areas.
The report, which analyzed 32,600 loans worth $1.98 billion disbursed by 41 lenders across Kenya, Rwanda, Tanzania, Uganda, and Zambia between 2020 and 2023, found that Hello Tractor surpassed industry benchmarks in financial inclusion, portfolio health, and profitability—even while serving high-risk populations.
Key Findings
All of Hello Tractor’s borrowers were previously unbanked, compared to 22% served by commercial banks.
The company recorded a 95% portfolio health rate, above the 86% industry average.
It posted 7.2% returns—well ahead of the 3.5% for commercial banks and significantly higher than the negative returns from social lenders and NBFIs.
Adesuwa Ifedi, Senior Vice President for Africa Programs at Heifer International, said the findings affirm the investment potential of rural communities. “By strategically blending innovation, trust, and local expertise, we are demonstrating that smallholder farmers can be central to Africa’s agricultural transformation,” she noted.
Innovation Over Credit History
Hello Tractor’s financing model is based on asset utilization rather than credit history. The pay-as-you-go (PAYG) system features 60-month loan terms and technical support from locally trained technicians.
Supported by Heifer International, the initiative also trains young people to maintain tractors, boosting equipment reliability and fostering trust between lenders and farmers.
Jehiel Oliver, CEO of Hello Tractor, emphasized the viability of rural entrepreneurs. “With the backing of long-term capital, robust after-sales support, and data-driven operations, we can finance a new generation of rural entrepreneurs making real impact,” he said.
Of the 88 loans backed by Heifer’s $2.5 million investment, 76% ranged from $50,000 to $200,000—and all were fully repaid by first-time borrowers.
Blended Finance, Real Impact
The Aceli report positions blended finance as a practical mechanism for unlocking commercial lending in agriculture. Hello Tractor’s model—featuring low credit losses and digital efficiencies—challenges traditional assumptions that rural lending is unprofitable.
The report supports Heifer International’s wider strategy of investing in local innovation, building strategic partnerships, and promoting commercially viable approaches to smallholder finance.
It offers a compelling case for scaling up agricultural mechanization and transforming food systems through inclusive finance and rural entrepreneurship.
