Johannesburg — A US$100 million (R1.890 billion) loan agreement between the African Development Bank (AfDB) and South Africa Taxi will empower local taxi operators struggling for financial support, eventually grow the transport sector and ultimately boost the country's industrialisation goals.
The loan agreement carries an eight-year tenor and includes a six-month grace period.
The financial package, comprising a senior loan of $10 million and an associated facility of R1,4 billion (about $97 million), will provide a powerful boost to industrialisation through improved urban mobility for working-class South Africans.
Lorenzo Cardoso, Chief Financial Officer and Director of SA Taxi, said the transaction is instrumental to their medium and long term strategy.
He added the tenor and size of the transaction would 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.
"We are proud to be an internationally recognised African business," Cardoso said.
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.
This enables the sustainability of the minibus taxi industry.
Amadou Oumarou, AfDB Director of Infrastructure and Urban Development, said the deal would bring real and tangible benefits to the people of South Africa.
He mentioned 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," Oumarou said.
Approximately 80 percent of SA Taxi clients are unbanked and may not ordinarily qualify for the formal banking sector.
Under AfDB's financing arrangement, approximately 25 percent of direct beneficiaries will continue to be women. Approximately 22 percent will be youth under 35 years old
Up to 90 percent of vehicles financed by SA Taxi are manufactured in South Africa, a boost to industrialization.