Six months ago, Jehiel Oliver left behind a comfortable life in Washington, D.C. to work on one of Africa’s most pressing problems: the inefficiency of its agricultural sector. He came up with an affordable “smart tractor” that’s designed to be shared among the continent’s millions of smallholder farmers.
Farms in Africa are tiny by American standards. The average one is just 2.3 acres compared to 178.4 hectares here. Most are cultivated by single families and there’s generally little use of heavy machinery, says the entrepreneur.
“The farmers operate on small plot sizes, which means they don’t make enough money to invest in a big piece of machinery,” says Oliver, who’s now based in Abuja, Nigeria. “There also aren’t bank loans for farmers, so it’s pretty difficult to finance a tractor.”
Oliver’s Hello Tractor model has several parts. First, there’s the tractor itself. It has just three wheels, operates with 15 horsepower (most American tractors have at least 50 horsepower), and can be driven both standing up and sitting down. Its main function is to prepare soil for planting, though the company is developing eight other attachments, including a hauler, a fertilizer distributor, and a thresher.
“You would probably be making a mistake bringing this little thing to the U.S., unless you have a small garden, but it’s suitable here because it’s more fuel efficient, and it can maneuver around the uneven plot sizes,” Oliver says.
Second–and this is the bit that makes it smart–each tractor incorporates a tracking device, so that it can be shared by its owner. Hello Tractor receives tractor service requests from farmers, which it then texts to nearby tractor owners. If their machine is available, they can lease it out for a fee, or offer do the work themselves, offsetting some of their costs. “It’s that shared consumption that makes ownership affordable and economical,” Oliver says.
Hello Tractor plans to offer low-interest loans to pay for its machine, which costs about $3,500. It’s raised $2 million for this and struck a deal with Nigeria’s central bank, which is guaranteeing 75% of the amount. That makes the loans more or less risk-free, as it covers most of the actual amount going to farmers (the remaining 25% is roughly the company’s profit).
Hello Tractor is close to finalizing an opening equity funding round to the tune of $1.5 million. At the same time, it has partnerships with the International Fund for Agricultural Development, which has given the tractor “preferred” status, and USAID. Both groups are investing heavily to develop Nigeria’s vast though chaotic agricultural system and will promote the tractor through its extension projects. Hello Tractor also produces its own radio show, where it offers farming advice.
Before setting up in Abuja, Oliver, who was recently named an Echoing Green fellow, worked in private equity, investment banking and as an agricultural consultant. He conceived the idea for Hello Tractor while working on a rice project in Asia. “I came up with this model and I thought ‘maybe let’s not leave this in hands of people who are not as passionate about it as I am.’ So, I started working on it on the side until it continued to grow and it took on a life of its own,” he says.
The tractors are currently made in China, though Oliver plans to move production to Nigeria next year, which should lower costs. It has seven test tractors in the field (including two in Ghana) at the moment, with an order for 300 more to be delivered in two months.
Oliver says living in Nigeria isn’t always easy, and he wouldn’t have made the move if it was just to do more banking and finance. “If it was just about the money, I wouldn’t be here. There’s easier money to make,” he says. “But when you see the enthusiasm of the farmers, it allows you to ignore some of the minor inconveniences of living here.”