SA Taxi signs lucrative R1.9 billion loan deal with AfDB to boost transport sector
CAPE TOWN – The African Development Bank (AfDB) and SA Taxi Development Finance, a wholly owned subsidiary of SA Taxi Holdings, have signed a $100 million (R1.9 billion) loan agreement to support the industry’s growing strategy to empower taxi operators with limited access to finance from traditional financiers.
According to a report on the AfDB’s website, the loan agreement, which carries an eight-year tenor and includes a six-month grace period, was signed on March 16 between the Bank’s director of Infrastructure and Urban Development Amadou Oumarou, and chief financial officer and Director of SA Taxi, Lorenzo Cardoso.
Cardoso said the funding transaction was 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 small and medium enterprises (SMEs) and create opportunities that ensure the sustainability of the minibus taxi industry.”
He said: “We are proud to be an internationally recognised African business.”
The financial package, comprising a senior loan of $10 million and an associated facility of R1.4 billion (about $97 million), would provide a powerful boost to industrialisation through improved urban mobility for working class South Africans, according to the report.
SA Taxi is a vertically integrated minibus taxi platform utilising specialist capabilities, enriched proprietary data and technology, to provide developmental finance, insurance and other services to empower SMEs, thus enabling the sustainability of the minibus taxi industry.
In addition to minibus vehicle retail and financing services, SA Taxi also provides specialised 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.
SA Taxi said the AfDB’s financing facility was expected to contribute a significant component of SA Taxi’s funding requirement over the next three years.
Oumarou described the signing as an exciting new chapter in the Bank’s partnership with SA Taxi that would bring real and tangible benefits to the people of South Africa with the prospect of scaling up this model to other African countries that are facing significant urban public transportation challenges.
“The evolving public transportation systems with para-transit minibuses filling the market segment between private taxis and municipal bus transit, is key to achieving South Africa’s economic success and social progress,” said Oumarou. “Therefore, the Bank is proud to be supporting the SA Taxi Group in its pioneering efforts to positively shape the ecosystem of public transportation services in South Africa.”
President Cyril Ramaphosa said, when delivering his statement on further economic and social measures in response to the Covid-19 pandemic, that the government was also working on additional support measures for vulnerable and affected sectors like the taxi industry.