Agri-Tech Partnership Introduces Pay-As-You-Go Tractor Model to Ethiopia’s Farmers

A new partnership between Heifer Ethiopia, Nigerian agritech firm Hello Tractor, and Ethiopia’s Ministry of Agriculture is introducing a pay-as-you-go tractor financing model that looks to reshape how smallholder farmers access mechanization, and how youth find work in agriculture.

Unveiled this week at the Hilton Hotel, the initiative allows farmers to rent or eventually own tractors without paying the full cost upfront. Heifer Ethiopia is financing the tractors, while Hello Tractor provides the technology platform, training, and digital tools to connect farmers with operators.

The model aims to bridge two of Ethiopia’s biggest rural challenges: low productivity and youth unemployment.

“Farmers of Ethiopia are done plowing with animals,” said Sofiya Kassa (PhD), state minister of agriculture, during the launch. “Agriculture contributes around 32% to our GDP, but there’s a lot more to be done to raise that number.”

She described the partnership as a glimpse of the future, where “Africa’s agriculture is not just mechanized, but smart, connected, and inclusive.”

Ethiopia’s reliance on traditional tools remains high, with nearly 95% of all agricultural production being supplied by smallholder farmers who can barely afford basic inputs like fertilizer. According to the Ministry of Agriculture, the share of farmland plowed by tractors has climbed from 5.7 percent in 2020 to 25% five years later. 

The lack of financial alternatives has also compounded the challenges of farmers. From the 1.5 trillion birr loaned out from Ethiopia’s financial industry in the fiscal year that ended in June 2024, a mere 6.3% flowed into agriculture

Still, demand far outstrips supply. Folu Okunade, co-founder and chief operating officer of Hello Tractor, said Africa faces a severe shortage, estimating Ethiopia alone needs about 400,000 tractors to meet current demand.

“We’ve worked with over 300,000 farmers and served more than 700,000 hectares of land,” he told Shega. “Seventy percent of that happened just this year.”

Out of 6,000 tractors operating on Hello Tractor’s digital platform across Africa, about 800 are currently active in Ethiopia.

The program is built around young “field agents”, trained intermediaries who connect farmers with mechanized services and collect farm-level data. According to Mao Yohannes, Hello Tractor’s country director for Ethiopia, more than 600 youth have already been trained in data collection and agricultural technology.

“Standout agents will have the chance to own tractors themselves,” Yohannes said. “They can save up to 15 percent of the purchase price over time.”

Heifer Ethiopia’s country director, Timoteos Borsamo, said the financing will revolve to support new youth cohorts as repayments flow back. “The Pay-As-You-Go model makes tractor services affordable for farmers while creating pathways to ownership for young people,” he told Shega.

Ethiopia’s 10-year agricultural plan aims to expand the national tractor fleet from 20,000 to 65,000 and combine harvesters from 2,700 to 15,000 units.

But for many farmers, heavy equipment remains out of reach; a single combine harvester can cost as much as 40 million birr, said Eshetu Hunde, executive director of the Agricultural Mechanization Division.

“The next phase is ensuring organized youth and smallholders can participate in this transformation,” he noted.