In a bid to modernize Ethiopia’s smallholder agriculture, Heifer International Ethiopia has introduced a new financing model that promises to make tractor ownership and mechanization accessible to rural farmers.
The initiative, launched in partnership with agritech firm Hello Tractor and the Ministry of Agriculture, was unveiled under the theme “Innovative Pay-As-You-Go (PAYG) Tractor Financing for Increased Agricultural Productivity and Job Creation in Ethiopia.” Formally launched on October 8th, at the Hilton Addis, the event drew senior government officials, private sector representatives, development partners, and media representatives gathered to discuss how the scheme could reshape rural livelihoods.
Heifer described the initiative as a strategic intervention to accelerate mechanization and generate employment across rural Ethiopia—a sector still dominated by smallholder farmers who rely heavily on manual labor. The program marks a significant step in blending technology and finance to modernize Ethiopia’s agriculture.
Implemented under the Africa Tractorization Strategy – Ethiopia Project (ATSEP), the model will initially roll out in five regional states: Oromia, Amhara, Central Ethiopia, Sidama, and Somali. Organizers said the program seeks to address one of the sector’s most persistent obstacles—smallholders’ limited access to affordable mechanization.
For decades, Ethiopian farmers—who produce the bulk of the country’s food—have struggled to improve yields because tractors remain prohibitively expensive and financing options scarce. The new PAYG model aims to change that by enabling young entrepreneurs to acquire tractors through flexible repayment plans.
Under this approach, repayments are made through income earned from providing tractor services, easing the traditional burden of collateral-based credit. The model is powered by Hello Tractor’s mobile platform, which connects farmers with tractor owners, allowing for easy booking, service tracking, and performance monitoring.
“The existing partnership has already demonstrated high repayment rates, improved farm efficiency, and higher incomes for both farmers and service providers,” organizers said, noting that the new phase aligns with Heifer Africa’s Transforming Africa’s Agriculture through Mechanization (TRAAM) agenda. “With this model, smallholders can now access affordable tractor services without the heavy cost of ownership.”
The broader TRAAM initiative emphasizes youth-led agricultural development, a key element of Heifer’s regional strategy. The organization expects the PAYG scheme to expand mechanization access to hundreds of smallholder farmers while creating jobs for young people and women as tractor operator and service providers.
As the model scales up, it is projected to enhance productivity, strengthen food security, and build resilience among rural households.
“By combining technology and innovative financing, we’re empowering farmers to achieve higher yields, create jobs, and build stronger rural economies,” said Timoteos Borsamo, Interim Country Director and Signature Program Technical Lead at Heifer International Ethiopia. “This initiative reflects our commitment to ending hunger and poverty—while caring for the Earth.”
Timoteos emphasized the model’s proven success in other parts of Africa, citing earlier implementations in Nigeria and Rwanda. He said Ethiopia’s rollout builds on those experiences, using smart technology to connect farmers, young entrepreneurs, and tractor owners.
“What makes this initiative remarkable is not only its innovation but its lasting impact,” Timoteos said. “It’s a powerful example of what we can achieve when technology, finance, and development come together for the benefit of smallholder farmers.”
Sofia Kassa (PhD), State Minister of Agriculture, called the initiative a milestone in Ethiopia’s broader push for inclusive agricultural transformation. She said the government is fully committed to modernizing the sector by introducing technological tools that can improve productivity and transform the lives of smallholder farmers.
While agriculture accounts for roughly 32 percent of Ethiopia’s GDP, Sofia acknowledged that the sector continues to underperform relative to its potential. She noted that many farmers, frustrated by years of low yields and limited access to mechanization, have begun to question whether meaningful change will ever come.
“This signals a growing reluctance among farmers to continue with traditional harvesting methods,” she said.
Sofia also pointed to the reluctance of financial institutions to invest in agriculture, which she described as one of the main barriers to progress. Many banks, she said, still view agriculture as a risky venture.
That perception, she argues, is misplaced. “Harvesting with technology leads to higher productivity.”
According to Sofia, the Pay-As-You-Go model could help close that financing gap by increasing transparency and reducing perceived risk. The system’s digital platform allows farmers to request tractor services while enabling owners to monitor usage and performance in real time.
For Timoteos, the model’s potential extends well beyond access to machinery. He said it could scale agricultural productivity nationwide, ensuring that no farmer is left behind in Ethiopia’s modernization drive.
The initiative, he added, will also create “decent jobs” for young tractor operators and entrepreneurs while empowering women to become more productive in agriculture. “The framework is not only about providing services,” he said. “It’s also about enabling asset ownership—especially for young people. We’ve already selected youth service providers. They will generate income, repay their loans, and ultimately own the tractors.”
Since its founding in 1944, Heifer International has worked with more than 52 million people worldwide to sustainably end hunger and poverty. Over the past five decades, the organization has supported rural communities across Africa, helping farmers and local producers strengthen their livelihoods and build resilient, self-sufficient economies.
