Kenya: Tech, Finance and Tractors

By Francis Mwangi

March 23, 2023

In sub-Saharan Africa, low levels of mechanization and the use of outdated farm equipment are partly to blame for low agricultural production among smallholder farmers. Even where farm equipment is available, high costs put the equipment beyond reach for most small-scale producers, especially women.

Technology remains critical to unlocking these barriers, as digital technologies can open new doors for inclusive and equitable farming around the world. Against this backdrop, Heifer has partnered with Hello Tractor, an agritech and tractor sharing company, to offer digital tech that connects women, girls and other marginalized groups to new resources, like financing and affordable equipment, to unlock opportunity and unleash potential.

A woman stands in front of her tractor.
Evalyne Awendo with the tractor she purchased with pay-as-you-go financing from Heifer and Hello Tractor. Photo by Francis Mwangi/Heifer International.

Through Hello Tractor’s pay-as-you-go tractor financing program, Evalyne Awendo has become a tractor owner and improved the efficiency of her farm and others in her community in Kisumu County, Kenya. Traditionally, accessing a bank loan to purchase a tractor is difficult for farmers like Evalyne, as the interest rates offered are high. Evalyne herself had already experienced devastating financial losses in her quest to get financing for modern equipment for her farm.

“I informed my husband that I was going to withdraw my money and get a loan to get the tractor,” she recalled. “Unfortunately, I did not succeed, and I lost all my savings.”

But Evalyne did not give up.

The mother of four heard about the pay-as-you-go financing program on the radio and immediately enrolled. The program builds on the tractor-sharing component of Hello Tractor’s mobile app, offering farmers the opportunity to make a small down payment and pre-book customers as part of their application for tractor financing. If approved, the farmer receives a tractor and, over time, hires it out to their pre-booked customers, repaying their equipment loan in the process. 

“We are betting on people, not their financial profiles.”
— Jehiel Oliver, Hello Tractor founder and CEO

After attending the onboarding training facilitated by Hello Tractor and Heifer, Evalyne got a call from Hello Tractor informing her that she had been shortlisted as a potential tractor recipient.

“For Hello Tractor and Heifer International, their core aim is to help the farmers and not structure their project like a business. With banks, it is a business and that is the difference,” Evalyne said. “As a woman, I am proud, and I tell fellow women not to be afraid. What a man can do, a woman will do better. A fellow woman encouraged me to strive to acquire my own tractor after using other people’s for years. It is a miracle in our village for a woman to own a tractor.” 

A woman watches while a tractor works on her farm.
Mechanization, such as using a tractor instead of preparing land by hand, significantly reduces expenses, time and labor for rural farmers. Photo by Francis Mwangi/Heifer International.

With more tractors available in rural communities through the Hello Tractor app, other farmers, like Rosemary Odhiambo, benefit from the option to hire the equipment at an affordable price only when they need it.

Rosemary started rice farming in 2010 and uses the little income she gets to educate and feed her children. Before the Hello Tractor project, she would spend a minimum of 10,000 Kenyan shillings, around $76, to get her land prepared for planting.  

“We used to prepare our land using ox or hoe, which was labor intensive and costly. … But right now the cost has gone down,” Rosemary said, explaining she now pays the equivalent of $39 to $46 by booking a tractor through the Hello Tractor mobile app. She also added that land preparation would previously take them up to three months in advance of the planting season, but with the adoption of farm mechanization, it only takes a maximum of one month.

Booking agents are always available to help farmers like Rosemary access tractor services on time, and mapping producers’ farms to assess land area and required costs is easier through the app, unlike in the past when middlemen and brokers manipulated land sizes to exaggerate fees.

A woman stands in front of a tractor working in the background.
Rosemary Odhiambo supervises tractor services on her farm booked through Hello Tractor. Photo by Francis Mwangi/Heifer International.

This project was informed by the realization that smallholder farmers often face challenges accessing farm equipment to prepare their land for production, said Agnes Kavatha, Heifer Kenya’s digitization and farmer visibility manager, while putting into consideration that Africa has arable land that is largely underutilized due to unavailability of enough tractors.

Agnes said the initiative is also an innovative way of promoting financial inclusion. “The most interesting bit of this innovation is that the women who are in most cases denied access to loans or taking financing have come forth and benefited,” she noted.

The pay-as-you-go financing model is designed to ensure borrowers repay their loans based on work done, said Jehiel Oliver, founder and CEO of Hello Tractor. The product, he explained, is meant to support an entirely new class of entrepreneurs who work hard to serve the farmers in their community without basing their access to credit on collateral.

“If you look at the way commercial banks lend today and across the African market, they look at your credit history, they look at how much cash you have in the bank, how much collateral you have,” he said. “So, you immediately lock out the vast majority of potential borrowers because most do not meet those criteria.”

In contrast, the Hello Tractor program and pay-as-you-go financing leverage knowledge of the tractor business and understanding that it can be profitable when the right entrepreneurs — farmers like Evalyne — are selected.

“We came into the market with a different hypothesis,” Jehiel said, explaining the focus is on unlocking opportunities for the so-called “unbankable” who possess entrepreneurial grit. “We are betting on people, not their financial profiles.”

Learn More

Heifer is committed to partnering with agritech entrepreneurs in Africa to revolutionize farming and food systems across the continent. Adesuwa Ifedi, Heifer's senior vice president of Africa programs, recently joined Jehiel and another tech innovator, Jemimah Wanjiku, co-founder of Kenya-based digital vet service DigiCow, at the SXSW conference in Austin, Texas for a panel discussion on the intersection of food security and technology. Watch a recording of the discussion to learn more about this important work.