The Taxi industry, whose protests last week resulted in many of the streets around Johannesburg and Midrand becoming gridlocked, is planning to embark on a national strike and protests next month.
The taxi industry moves approximately 15 million people every day. With an annual revenue estimated at around R39,8 billion, the industry is also drawing attention from local banks such as Absa. The local taxi industry employs approximately 600 000 drivers.
“We have strong relationships with key players in the local taxi industry, working very closely with TaxiChoice (the business arm of SANTACO) and the NTA (National Taxi Alliances) to address taxi finance related issues,” says Nelisiwe Baloyi, head of Absa Vehicle and Asset Finance (AVAF).
Absa provides funding to the value of R650 million to operators across the industry annually, allowing a flexible financing structure that ascribes to responsible lending practices whilst also assisting the operator to achieve their ambitions.
The amended NCA requires a new stringent credit risk assessment, as well as an affordability calculation and income verification for all new applications which might impact adversely on the approval status, credit limit and risk-based-pricing extended to the operator. However Absa offers a competitive pricing structure, benefitting the operator, with lending rates ranging from 10.5% to 17%, depending on the credit profile of the customer. Our terms are furthermore limited to 60 months to ensure that the operator takes ownership sooner.
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Absa also fixes the interest rate (currently this varies between 10.5% to 17%) to prevent any shock impacts on installments due to interest rate fluctuations. “Required deposits are as low as R20 000.00 on a Toyota Quantum and Nissan NV350 and this is against the industry norm of R60 000.00+.” says Baloyi.
AVAF has a dedicated Taxi Portfolio to ensure that taxi applications are processed seamlessly and that operators receive differentiated service.
“This highly unappreciated industry is an expression of entrepreneurship upon which millions of people rely on, every day. We are committed to contributing towards the creation of an economy that benefits all citizens of the country, creating lasting benefits for the communities in which we operate. As a financing partner to the taxi industry, we see ourselves playing both the role of advisor and financier , ensuring operators can achieve their ambitions and create shared growth,” concludes Baloyi.
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