New Holland Agriculture has partnered with EFTA (Equity for Tanzania) for the acquisition of 200 tractors to assist the mechanisation of smallholder farmers in Tanzania.
This new collaboration between the brand and the leasing company enables the financing of equipment without collateral being required as a guarantee, giving the chance for more farmers to benefit from modern machinery.
Tanzania to increase production
The scheme has led to the delivery of 200 TT75 4WD tractors, to help support the country’s 2025 vision for mechanisation, increased agricultural production and improved food security.
The transaction has been facilitated by Hughes Agriculture Tanzania Ltd. (HAT), New Holland Agriculture’s local distributor in Tanzania, and CRDB, one of Tanzania’s leading banks.
HAT and EFTA have been working in partnership for over five years, but this is the first time a broader partnership, including a large manufacturer and a bank, has been formed to significantly scale up tractor access for smallholder farmers in the country.
It is expected to be the beginning of an ongoing partnership to grow mechanisation in East Africa, including Kenya.
After the delivery of the 73hp machines, an official training programme for farmers was launched at the end of February and will continue until the end of April 2023 across several districts of Tanzania, to provide the farmers with the technical support they need to increase productivity.
Finance for the missing middle
EFTA, which is registered as a private company, is ultimately owned by the development finance institutions of the UK and Norwegian governments.
Nicomed Bohay, its managing director, notes that its major role is to provide access to finance for farmers and growers who would not normally meet eligibility criteria from mainstream financial institutions.
This is regarded as a special segment of small and medium-sized enterprises (SMEs) usually referred to as the ‘missing middle’, and comprises farmers who are too big for micro-finance but too small for conventional banks.
Farming accounts for 23% of Tanzania’s GDP (gross domestic product) and yet 66% of the workforce is engaged in agricultural activity.