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For rural MSMEs, a lack of access to productive assets often constrains growth and undermines resilience. Small Foundation recently co-sponsored an impact study of our partner, leasing company EFAfrica Group (EFAG), to understand what changes when MSMEs gain access to equipment. This study is one part of our work to understand the different ways that system change can happen, and it forms part of our knowledge base for our strategy. The findings offer evidence of how leasing productive assets can strengthen business operations, support employment and build resilience in rural economies.
ACCESS WHERE FEW ALTERNATIVES EXIST
We know that equipment such as tractors, power tillers and transport vehicles are critical tools, yet for many rural businesses, they remain out of reach. Through the study, we learned that 80% of surveyed clients had not previously had access to similar leased equipment. 71% reported that they could not easily find a good alternative. Most of these clients are small rural enterprises. Nearly half (45%) have no full-time employees, and those that do employ full time staff had a median of two people. More than half (52%) are farmers; others operate in transport, logistics and related rural services.
OPERATIONAL CHANGE COMES FIRST
The most immediate impact of equipment finance is operational. 86% of clients reported that their business operations improved because of their lease. Rural MSMEs described several practical changes:
- Preparing land on time rather than waiting for hired tractors
- Expanding cultivated area
- Reducing transport bottlenecks
- Improving reliability in service delivery
By improving operational control, this equipment finance enabled MSMEs and related rural infrastructure to function more efficiently and predictably.
INCOME AND MARKET GROWTH
Operational improvements were closely linked to financial performance. 37% of clients reported that revenue “very much increased” since leasing equipment, with an additional 51% saying revenue “slightly increased”. Many also reported growth in customers served and suppliers engaged. Importantly, these gains were not described as one-off windfalls. They reflected stronger, more consistent business performance, likely at least in part because once the lease is repaid, the business keeps the equipment and can re-engage with EFAG to acquire more.
EMPLOYMENT SUPPORTED IN RURAL AREAS
The study showed that equipment finance supports employment within rural MSMEs. 76% of EFAG clients surveyed reported hiring seasonal workers (median of ten workers per season). Many reported increases in both full-time and seasonal employment since acquiring leased equipment.
In rural contexts, employment often fluctuates. We now understand more deeply how equipment allows businesses to operate at greater scale and consistency, which in turn supports additional labour demand. While precise job counts are very difficult to determine definitively, the overall direction of change is clear: equipment finance strengthens the capacity of rural MSMEs to support livelihoods.
INDIRECT IMPACT ON OTHER FARMERS AND BUSINESSES
As part of the study, we looked at the impact that EFAG customers have beyond their own operations. Farmer-clients frequently rent out their tractors or tillers to neighbouring farmers, generating additional income while increasing access to mechanisation locally. Agribusiness clients provide ploughing, transport or crop purchasing services to smallholder farmers.
Interviews with farmers interacting with EFAG clients revealed improvements in land preparation, production and quality of life. This suggests that it is possible for the impact of equipment finance to ripple outward through local rural economies, particularly where business models are service-oriented.
RESILIENCE IN THE FACE OF CLIMATE VOLATILITY
Rural MSMEs operate in environments shaped by climate risk. Clients frequently cite inconsistent rainfall, drought and extreme weather as core challenges. While equipment does not remove climate risk, it appears to strengthen resilience by:
- Enabling faster and more timely land preparation when rains arrive
- Reducing dependence on unreliable hired machinery
- Adding income streams from equipment rental
Clients also highlighted the importance of repayment structures that accommodate seasonal income patterns, which EFAG provides.
For rural MSMEs, resilience is not abstract. It is the ability to continue operating when conditions are volatile. Equipment finance, when designed appropriately, contributes to that stability.
CUSTOMER EXPERIENCE MATTERS
Client satisfaction is strong, with a Net Promoter Score of 57. However, 29% report experiencing challenges, including concerns related to customer service and equipment quality.
For rural MSMEs, downtime or unresolved issues can have significant consequences. To address this, EFAG screens suppliers of equipment before financing it to try and ensure parts and service are available within reasonable travelling distance from the customer. Strengthening institutional systems and responsiveness is therefore part of strengthening MSMEs themselves.
A LONG-TERM PARTNERSHIP
Small Foundation’s partnership with EFAG has been built over time, combining early-stage support over ten years ago with follow-on equity and debt financing to support the business to scale. In August 2025, Small Foundation provided a USD $1 million short-term loan facility to facilitate the activation of new equipment leases, directly enabling additional rural MSMEs to access productive assets.
Overall, the study provides detail on how equipment finance has strengthened rural MSMEs by improving operations, increasing income, supporting employment and contributing to resilience. EFAG’s growth and impact over time suggest its model is well-suited to reaching and supporting underserved rural businesses.
“Through [their partnership and financial support] Small Foundation has been a key part of enabling EFAG to grow its lease book by 124% over the past four years and significantly grow profits, to position us for the next phase of growth and impact.”
Michiel Timmerman, Co-Founder and Executive Chair of EFAG
We wish to thank the team at 60 decibels for managing and carrying out the study and AgDevCo for co-sponsoring and engaging on the research with us and EFAG.
