How Silicon Valley Innovations are Literally Breaking Ground Across Africa
An ‘Uber for Tractors’ Boosts Income of Nigerian Farmers
On a recent trip back to the United States, I took an Uber and made small talk with my driver on the way to my destination. He told me he only bought the car we were in because he had this job with the smartphone-based car service.
This blew me away.
Technological innovation applied to a simple concept like sharing has created an entirely new class of consumers — those who purchase otherwise unattainable assets because of opportunities in the new “sharing economy.”
Platforms like Uber, Lyft and Airbnb are shifting consumers’ decisions, making otherwise unattainable assets not only affordable but lucrative.
This is precisely the hypothesis that Hello Tractor is built upon. At Hello Tractor, we use innovation quite common in Silicon Valley to assist farmers with affordable access to farm equipment.
In Nigeria, there are 52 million small-scale farmers, a majority of them women. They rely on hired labor, which is expensive and inefficient — and oftentimes unavailable. This means crops are planted late, land is under-cultivated and farm families lose income.
The small plots of land these farmers work on make buying an expensive tractor uneconomical. So Hello Tractor came up with a simple solution, borrowing from the sharing economy playbook.
We developed technology that turns a tractor into what we call a “Smart Tractor.”
We combine an 18 horsepower, commercial grade, two-wheel tractor with a GPS monitoring unit that houses telematic and SMS components — allowing us to track and monitor the machine. These tractors can till, thresh, haul up to 1 ton, irrigate and handle other vital farming needs.
We then connect Smart Tractor owners with local farmers texting for tractor services.
It’s Uber for tractors.
A farmer simply sends a text requesting tractor service. A Smart Tractor owner arrives within days and provides a service that is 40 times faster than manual labor and at one-third of the cost.
The Smart Tractor owners, for their part, earn five times the average rural daily wage rate.
We keep track of the machine health with this cloud-based technology and provide our customers with on-site repair and maintenance with our local partner Habgito Nigeria. This brings in income for not only Smart Tractor owners but also the youth repair technicians that service them.
But we couldn’t stop here. Our customers are largely rural and low income, which means they lack access to credit, so we also engaged local commercial banks and structured appropriate financing for them. We secured loan guarantees to assume a portion of the risk associated with these loans.
Finally, we provide after-sales marketing support to our Smart Tractor buyers, closely monitoring usage of their machine and activating targeted marketing efforts to boost text for service activity when usage rates drop below a certain level.
This feature allows us to anticipate and prevent loan defaults in real time.
You see, unlike in Silicon Valley, when you work in agriculture in a place like Nigeria, you don’t have the luxury of focusing on just one thing.
When we set our sights on Nigeria from our home office in Washington, D.C., aided with a $150,000 grant from USAID’s Development Innovation Ventures, we thought the Smart Tractor was enough. We thought, if we build it they will come.
However, what we realized is that without a farm bill, without functioning capital markets, without favorable trade policy, Nigerian farmers were left to compete with a hand tied behind their back, standing no chance to purchase a tractor without our more involved support.
So in order to sell our machines, we were forced to wear the hat of not only tractor seller but also service booking agent, software developer, financier and sometimes even government lobbyist.
This work is challenging, but our farmers are all the better for it.
Next time you find yourself in rural Nigeria, and strike up some small talk with a tractor owner. Maybe they will tell you that their purchase was made possible by Hello Tractor!