SA Taxi has secured R1.9 billion ($100 million) in loans to empower taxi operators.
SA Taxi, which is owned by JSE-listed Transaction Capital, is vertically integrated into the minibus taxi industry. The South African National Taxi Council (SANTACO), which is a national body which represents the interests of its members who are individual minibus taxi operators, owns 25% of SA Taxi.
The company has signed a $100 million loan agreement with the African Development Bank.
The financial package, comprising a senior loan of R190 million and an associated facility of R1.4 billion, will provide a powerful boost to industrialization through improved urban mobility for working-class South Africans, said SA TAXI.
The loan will be used to support the firm’s growth strategy to empower taxi operators with limited access to finance from traditional financiers, the company said.
In addition to minibus vehicle retail and financing services, SA Taxi also provides specialized minibus taxi insurance, vehicle tracking, maintenance, and refurbishment services to taxi operators through SA Taxi Auto Repairs and SA Taxi Protect, its wholly-owned subsidiaries.
While approximately 80% of SA Taxi clients are unbanked and may not ordinarily qualify for the formal banking sector, under the bank’s financing arrangement, approximately 25% of direct beneficiaries will continue to be women and approximately 22 % will be youth under 35 years old.
The Bank’s facility is expected to contribute a significant component of SA Taxi’s funding requirement over the next three years.
“The funding transaction entered into with the African Development Bank is instrumental to SA Taxi’s medium and long term strategy. The tenor and size of the transaction will contribute towards the continued success of SA Taxi to empower SMEs and create opportunities that ensure the sustainability of the minibus taxi industry,” Lorenzo Cardoso, Chief Financial Officer and Director of SA Taxi, said.
“We are proud to be an internationally recognised African business.”
Up to 90 % of vehicles financed by SA Taxi are manufactured in South Africa, a powerful boost to industrialization. This makes the loan facility consistent with the Bank’s Ten-Year Strategy (2013 – 2022) and Country Strategy Paper for South Africa 2018-2022, as well as two of its High 5 priorities: Industrialize Africa and Improve the Quality of Life for the People of Africa.
The Bank’s funding will ultimately support SA Taxi’s continued investment in the taxi industry and its strategy of enabling taxi operators to replace old vehicles with newer, safer and lower emission minibus taxis.