African small holder farmers are set to double their production after they accessed loans worth $1.98billion from Heifer International and Hello Tractor.
This is because small holder farmers across Africa still find it hard to access loans from the banks and other formal lending institutions.
Reasons advanced by bankers include knowledge gaps among farmers about the different financial management practices and packages that could suit their needs, the vulnerability of the agriculture sector
They however call for partnerships so as to support small holder farmers to remain productive. Examples of such partnerships include Heifer International and Hello Tractor, which has so far given out about 32,600 loans, valued at $1.98billion.
According to the 2024 report from Aceli Africa and Dalberg, the money was disbursed by 41 lenders in Kenya, Rwanda, Tanzania, Uganda, and Zambia between 2020 and 2023. From their analysis, Hello Tractor becomes the leader in extending finances to farmers.
According to Adesuwa IFedi, Senior Vice President for Africa Programs at Heifer International, the report validates Heifer’s long-standing belief that rural communities offer significant investment potential.
“By strategically blending innovation, trust, and local expertise, we are demonstrating that smallholder farmers can be central to Africa’s agricultural transformation,” she said.
She explained further that 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,” she added.
Of the 88 loans facilitated with a $2.5 million investment from Heifer International, 76% ranged between $50,000 and $200,000, achieving a 100% repayment rate among first-time borrowers.
“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,” Jehiel Oliver, CEO of Hello Tractor explained.
Adding that “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.”
The Aceli report provides compelling evidence for the effectiveness of blended finance as a mechanism to unlock commercial capital for agri-SMEs.
