Report Finds Agricultural Finance Model Created by Heifer International and Hello Tractor Profitable, Effective

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A report by Aceli Africa and Dalberg confirms the significant impact of the collaboration between Heifer International and Hello Tractor in unlocking agricultural finance for resource constrained smallholder farmers across Africa. The findings demonstrate how the strategic combination of blended capital, local innovation and collaborative partnerships is driving profitable, scalable and inclusive growth within rural economies.

The Aceli 2024 Financial Benchmark Report, which analyzed approximately 32,600 loans valued at $1.98 billion disbursed by 41 lenders in Kenya, Rwanda, Tanzania, Uganda and Zambia between 2020 and 2023, identifies Hello Tractor — a partner in Heifer’s regional initiative to improve African smallholders’ access to mechanization — as a top performer in financial services for small- and medium-sized agricultural enterprises. Notably, Hello Tractor surpassed the average profitability of the commercial banks, nonbank financial institutions and social lenders included in the analysis.

The report highlights several notable findings:

• Expanding Access to Finance: All of Hello Tractor’s borrowers had no previous access to formal banking services, a sharp contrast to the 22 percent inclusion rate among clients served by commercial banks.
• Strong Loan Performance: Hello Tractor maintained a repayment rate of 95 percent, well above the 86 percent average reported by commercial banks.
• Sustainable Profitability: Even while working with borrowers typically seen as higher risk, Hello Tractor achieved a profitability rate of 7.2 percent. This surpasses the average for commercial banks (3.5 percent) and stands in contrast to the losses reported by many social lenders (-16.8 percent) and nonbank financial institutions (-6.8 percent).

These results highlight the effectiveness of Hello Tractor’s pay-as-you-go tractor financing model, which is supported by 60-month loan terms and a growing network of hub-based after-sales support. Through its partnership with Hello Tractor, Heifer has also facilitated the training and certification of local youth as tractor technicians, ensuring consistent uptime for tractors and building confidence among financiers and farmers.

“This report confirms our firm belief that rural communities offer significant investment potential,” said Adesuwa Ifedi, senior vice President of Africa programs at Heifer International.

“By strategically combining innovation, trust and local expertise, we are demonstrating that smallholder farmers can be instrumental in Africa’s agricultural transformation.”

Hello Tractor’s success is rooted in its approach of underwriting assets rather than solely relying on individual credit histories. By extending credit based on the productive use of tractors, they are opening opportunities for those previously excluded from traditional financing. Of the 88 loans facilitated with a $2.5 million investment from Heifer International, 76 percent ranged between $50,000 and $200,000, and the repayment rate among first-time borrowers was 100 percent.

“Our collaboration with Heifer International through the mechanization initiative for Africa has clearly demonstrated that smallholder farmers and rural entrepreneurs are viable and profitable customers,” said Jehiel Oliver, CEO of Hello Tractor. “With long-term capital support, robust after-sales service and data-driven operations, we can finance a new generation of rural entrepreneurs who are making a significant impact in their communities.”

The Aceli report provides compelling evidence that blended finance can be an effective tool for attracting commercial investment into agricultural small- and medium-sized enterprises. Hello Tractor’s approach, marked by reliable loan repayment and the use of technology to reduce costs, challenges the common belief that lending to rural clients is always too risky.

This collaboration reflects three core elements of Heifer International’s approach:

• Supporting Local Solutions: Backing and expanding innovations like Hello Tractor that are designed with African farmers and conditions in mind.
• Building Strategic Partnerships: Bringing together charitable and business partners to achieve lasting and far-reaching results.
• Creating Viable Business Paths: Showing how financing for smallholder farmers can grow beyond donor support to reach larger scale and financial sustainability.

This partnership illustrates how strategic collaboration can strengthen food systems across Africa. As mechanization advances agricultural practices on the continent, the alliance between Hello Tractor and Heifer International presents a clear example of how accessible financing and community-based implementation can help realize the region’s agricultural promise.

More about Heifer International

Heifer International supports smallholder farmers to sustainably address hunger and poverty in their communities while caring for the Earth. We apply a food systems approach to helping farmers earn more income and to generate economic opportunity for rural women, youth and Indigenous populations.

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