Johannesburg – Developmental credit provider SA Taxi has
inked a R100 million financing agreement.
In a statement issued on Wednesday, the firm, part of the
Transaction Capital group of companies, said it had signed the deal with the Small
Enterprise Funding Agency (SEFA), which is wholly-owned by the Industrial
Development Corporation.
The injection is expected to result in development and funding of 250 black
enterprises and the creation of about 450 jobs.
SA Taxi will use the injection to further its business
model, which sees it providing financing to people who want to buy or upgrade a
taxi, but would typically not meet traditional banks’ criteria in terms of collateral.
SA Taxi’s business model includes the financing of
industry-specific vehicles, provision of bespoke taxi insurance that helps
operators protect their income-generating asset and optimise cash flow, a
Taximart division that restores pre-owned vehicles to a virtually new
condition, and a dealership network through which both new and pre-owned minibus
taxis are sold directly to taxi operators.
It is funded both locally and internationally by a
diversified pool of debt investors and argues it plays an essential role in
linking institutional funding to local South African small and medium
enterprises (SMEs).
Read also: Transaction Capital set on growing SA Taxi
SA Taxi capital markets director, Mark Herskovits, says
the deal “marks the first time a
South African state owned entity has partnered with us directly”.
“It is an indication of the value we offer to small
business owners in the minibus taxi industry and our close alignment with
government’s approach to improving land transport in this country to the
benefit of all stakeholders.”
Herskovits also says the deal “acknowledges the
importance of the role we play in supporting the recapitalisation and
sustainability of the industry”.
SA Taxi currently finances over 26 000 of the estimated
200 000 minibus taxis operating in South Africa and has empowered over
42 000 SMEs.
SEFA CEO Thakhani Makhuvha notes ““SA Taxi fills a critical funding gap by
providing credit to entrepreneurs who would otherwise be excluded from the
formal economy, given their credit profiles. The strategic public private
partnership we have entered into with SA Taxi will therefore focus on
developing and supporting black entrepreneurs using SA Taxi’s existing tried
and tested funding platform.”
BUSINESS REPORT ONLINE