By George Munene

Global nonprofit Heifer International has partnered with Hello Tractor to introduce a Pay-As-You-Go (PAYG) rent-to-own tractor financing program.

Dubbed Tractors 4 Africa (T4A), it will enable Kenyan and Nigerian agri-entrepreneurs to become tractor owners at a reduced cost and without requiring any security given they have a farmer network.

The financing model will require a tractor owner to only pay five per cent upfront of the total tractor cost--from between Sh3.5 million to 5 million. This is repaid through a flexible tenure of between three to five years.

Interest rates will range from 10-14%, depending on the borrower's creditworthiness.

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Before qualifying, the loanee will need to have pre-booked 1,235 acres for ploughing in the Hello Tractor app. Depending on the value of the tractor and the number of implements, up to Sh 850 will be deducted for every acre of land serviced to pay down the loan.

“This is a simple, affordable, and flexible tractor finance program. Unlike traditional banks, we are also in tune with the nuanced dynamics within African agriculture. This helps us better serve farmers,” said Belinder Jabuya, Hello Tractor’s PAYG Account Manager.

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Agricultural mechanisation in Africa helps to overcome labour bottlenecks, enabling farmers to cultivate up to 61 per cent more land on time and report over 71 per cent more yield. Despite this, around 80-90 per cent of farmers on the continent still rely on manual labour or draught animals.

Beyond providing affordable tractor financing, the Tractors 4 Africa project is purposefully geared to bring more of the continent's land under mechanised agriculture.

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