CFO Lorenzo Cardoso: The agreement is instrumental to SA Taxi's medium and long-term strategy.
The African Development Bank and SA Taxi Development Finance, a subsidiary of SA Taxi Holdings, have signed a $100 million loan agreement to support taxi operators during the Covid-19 crisis.
SA Taxi CFO and director Lorenzo Cardoso says:
“The funding transaction, entered into with the African Development Bank, is 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 SMEs and create opportunities that ensure the sustainability of the minibus taxi industry. We are proud to be an internationally recognised African business.”
The loan agreement, signed on 16 March, includes a financial package that comprises a senior loan of $10 million and an associated facility of R1.4 billion (about $97 million).
According to a statement released by the African Development Bank, approximately 80 percent of SA Taxi clients are unbanked and don't usually qualify for formal banking sector, so this agreement will support them in their time of need. Approximately 25 percent of direct beneficiaries will continue to be women and approximately 22 percent will be youth under 35 years old.
The bank’s director of infrastructure and urban development Amadou Oumarou says this partnership will bring real and tangible benefits to the people of South Africa. There is even a prospect to scale this model up to other African countries that are facing significant urban public transport 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,” Amadou says. “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 statement concludes that the bank’s funding will ultimately support SA Taxi’s continued investment in the taxi industry and its strategy of enabling taxi operators to replace old vehicles with newer, safer and lower emission minibus taxis.