A new report has identified a profitable model for financing 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 viable path for improving access to finance in rural areas.
The report analyzed 32,600 loans worth $1.98 billion, disbursed by 41 lenders across Kenya, Rwanda, Tanzania, Uganda, and Zambia between 2020 and 2023. According to the findings, Hello Tractor performed above industry benchmarks in financial inclusion, portfolio health, and profitability, despite operating in what is often seen as a high-risk segment.
All of Hello Tractor’s borrowers were previously unbanked, compared to 22 percent of borrowers served by commercial banks. The company recorded a portfolio health rate of 95 percent, exceeding the commercial bank average of 86 percent. In terms of profitability, Hello Tractor posted 7.2 percent returns, ahead of the 3.5 percent reported by commercial banks and significantly above the negative returns of -16.8 percent and -6.8 percent reported by social lenders and non-bank financial institutions (NBFIs) respectively.
“This report validates our long-standing belief that rural communities offer significant investment potential,” said Adesuwa Ifedi, Senior Vice President for Africa Programs at Heifer International. “By strategically blending innovation, trust, and local expertise, we are demonstrating that smallholder farmers can be central to Africa’s agricultural transformation.”
Hello Tractor’s financing model is based on asset use rather than credit history. Its pay-as-you-go approach includes 60-month loan terms and technical support provided by a network of locally trained technicians. Supported by Heifer International, the initiative has facilitated the training and certification of young people to maintain tractors, improving reliability and strengthening trust among lenders and farmers.
“Our collaboration with Heifer International through the Mechanization for Africa Initiative has clearly shown that smallholder farmers and rural entrepreneurs are viable and profitable customers,” said Jehiel Oliver, CEO of Hello Tractor. “With the backing of long-term capital, robust after-sales support, and data-driven operations, we can finance a new generation of rural entrepreneurs who are generating significant impact within their communities.”
Of the 88 loans backed by a $2.5 million investment from Heifer International, 76 percent ranged between $50,000 and $200,000. All loans achieved full repayment from first-time borrowers.
The Aceli report positions blended finance as a practical tool for unlocking commercial lending in agriculture. Hello Tractor’s approach, which includes low credit losses and digital efficiencies, challenges the view that rural lending is inherently unprofitable.
The findings also reflect Heifer International’s broader strategy of investing in local innovation, forming strategic partnerships, and promoting commercially sustainable models in smallholder finance. The report offers a case for scaling up mechanization and transforming food systems through inclusive finance and rural entrepreneurship.
