The African Development Bank (AfDB) has signed a $100-million loan agreement with SA Taxi Development, which is a wholly-owned subsidiary of SA Taxi Holdings (SA Taxi). The loan agreement has an eight-year tenor and incorporates a grace period of six months. The agreement is composed of a $10-million senior loan and a R1.4-billion (about $97-million) associated facility. It was actually signed in mid-March but only publicised by the AfDB more than a month later.

“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,” points out AfDB director of infrastructure and urban development Amadou 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.”

“The funding transaction entered into with the African Development Bank is instrumental to SA Taxi’s medium and long-term strategy,” explains SA Taxi director and CFO Lorenzo Cardoso. “The tenor and size of the transaction will contribute towards the continued success of SA Taxi to empower SMEs [small and medium-sized enterprises] and create opportunities that ensure the sustainability of the minibus taxi industry. We are proud to be an internationally recognised African business.”

In its press release, the AfDB describes SA Taxi as a “vertically integrated minibus taxi platform utilising specialist capabilities, enriched proprietary data and technology, to provide developmental finance, insurance and other services … 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.”

Some 80% of SA Taxi’s customers are unbanked and might not usually qualify for loans from the formal banking sector. However, under this loan agreement, some 25% of the direct beneficiaries will be women and about 22% will be younger people under 35 years of age.

The AfDB highlights that as many as 90% of the minibus taxis financed by SA Taxi are manufactured in South Africa. This means that the loan is boosting South African manufacturing. The loan thus fulfils two of the AfDB’s “High 5” priorities – industrialise Africa and improve the quality of life for the people of Africa. It is also consistent with the bank’s 2013-2022 Ten-Year Strategy and its Country Strategy Paper for South Africa 2018-2022.