Absa Bank Kenya PLC is increasing its lending limit under an ongoing KES500 million financing agreement with agri-tech firm Hello Tractor and John Deere, a U.S. agricultural machinery manufacturer signed two years ago. The agreement finances the purchase of tractors and implements for use by Kenyan farmers on a Pay-As-You-Use basis.

Under the initial phase, Hello Tractor fully utilised the KES 0.5 billion to purchase the 100 John Deere tractors and other inputs, opening an extension window for enhanced lending with the goal of reaching and impacting more farmers.

The financing agreement allows Hello Tractor to expand its tractor-hailing service to farmers in Kenya’s breadbasket regions. Farmers are able to hire and use tractors through Hello Tractor, an innovative app that connects farmers leasing tractors with the owners, suppliers, and manufacturers of tractors and associated implements. This is expected to expand the agricultural sector’s access to mechanized farming solutions.

Absa Bank Kenya full year net profit rises 27.5pc to Sh20.9 billion

Speaking during the launch of Hello Tractor’s new Hub in Kisumu County, Absa Bank Kenya PLC Business Banking Director, Elizabeth Wasunna-Ochwa, said the financing deal has substantially widened access to modern and efficient tractors by farmers which has enabled them to cultivate larger areas of land more efficiently, thereby raising their contribution to the country’s national food security.

“The high cost of acquiring tractors has over the years been a significant challenge for farmers in Kenya who would like to mechanise their farming operations. As Absa, we believe that this partnership with John Deere, a world-renowned leader in agricultural machinery solutions, has not only lowered the barriers to accessing tractors, but has also boosted their enterprise by significantly impacting the livelihoods of farmers and the communities around them. Through this mechanized farming practices, we are reducing farming costs and creating efficiencies in food production,” said Ms. Wasunna.

It is anticipated that the arrangement will result in 3,000 new direct jobs in the long run and mechanise more than 300,000 farmers in the country. This is in turn expected to significantly boost their agricultural productivity and income by enabling them to produce nearly 1 million metric tons of food worth more than KES. 21.4 billion (Equivalent to US $150 million).

On their part, Hello Tractor CEO Jehiel Oliver noted that the partnership with Absa Bank Kenya has provided the financial support needed to extend the programme to more farmers for better efficiency.

“Our mechanisation hubs are building and anchoring an ecosystem where we bring together farmers, tractor owners, input providers and agronomists to ensure farmers maximize their productivity and income. Kisumu was our first hub and we currently have 50 tractors serving 150,000 acres of land. Our partnership with Absa has enabled us to support farmers to run their farms efficiently by providing inputs, expert advice, training centres for farmers for best agricultural practices. This has triggered growth across Kenya which is now extending to other African countries,” he said.

Speaking on behalf of Kisumu County Government CEC Ministry of Agriculture Kenneth Onyango applauded the efforts by Hello Tractor and Absa to help farmers transition from subsistence farming to commercial.

 “I would like to applaud efforts by Hello Tractor and Absa to help farmers transition from subsistence farming to commercial farming. This is in line with the County’s mandate on food security, which is a primary focus for the County Government,” he said.

Agriculture is a major contributor to Kenya’s economy, accounting for roughly 50% of the country’s Gross Domestic Product (including linkages), 60% of export revenues, and 40% of the workforce.

Absa Bank Kenya is committed to supporting players in the agribusiness sector through its information-led agribusiness proposition which seeks to provide sustainable financing and non-lending interventions such as advisory through its agribusiness specialists. The bank has adopted a value chain approach, actively providing solutions for input providers, primary producers, aggregators, and agro-industry players. Additionally, this financing agreement has allowed the participation of more women in farming mechanisation aligning with Absa’s overall strategy.

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About Absa Bank Kenya:

Absa Bank Kenya Plc is listed on the Nairobi Securities Exchange and is one of Kenya’s leading financial institutions. The Bank has been a major player in Kenya’s financial landscape, engaged in personal and institutional banking, bancassurance and asset management.

The Bank has a regional and global footprint which enables it to offer end-to-end financial solutions to retail and institutional clients. It has also been associated with several market firsts, such as the launch of the first ATM, WhatsApp banking, Sharia-compliant banking and unsecured lending.

Absa Bank Kenya has a presence in 38 counties. It has 83 branches, 208 ATMs and a robust Internet and mobile banking platform. The bank’s purpose is to empower Africa’s tomorrow, together… one story at a time.

About John Deere

With a rich history of more than 180 years, John Deere is a trusted, world-renowned leader in producing turf, agricultural, construction, and forestry machinery solutions with state-of-the-art precision technology. With its continued focus to strengthen its presence throughout the Africa Middle East region (“AME”), John Deere AME serves its customers through more than 218 dealer touch points across Africa Middle East and supports its dealer network with a Regional Parts Distribution center in South Africa as well as sales and marketing offices in South Africa and Kenya.

Committed to delivering a distinctive customer experience coupled with solutions-driven advice from its authorised dealer network and John Deere Financial Solutions, John Deere AME promotes food security while actively driving a successful and inclusive agricultural community while supporting Africa’s growth via its construction and forestry solutions.

With core values of integrity, quality, commitment and innovation, John Deere AME remains dedicated to the success of its customers, to those who cultivate, harvest, transform, enrich and build upon the land to meet the world’s dramatically increasing need for food, clothes, shelter and infrastructure.