Green light for taxi cash

BOOST: INDUSTRY CREDIT PROVIDER GETS R100M TO AID ENTREPRENEURS

Initiative will fund 250 black enterprises and create about 450 jobs.

SA Taxi has signed a R100 million financing agreement with the Small Enterprise Funding Agency SOC Ltd (Sefa) in a bid to support small entrepreneurs running minibus taxi operations.

SA Taxi, one of the country’s few developmental credit providers, said the initiative was expected to result in the development and funding of 250 black enterprises and the creation of about 450 jobs.

Mark Herskovits, SA Taxi capital markets director, said yesterday the agreement with Sefa marked the first time a South African state-owned entity had partnered with them directly.

Herskovits said this was particularly critical as the industry was a founding pillar of South Africa’s public transport sector and, therefore, of the economy.

“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 said.

“It also acknowledges the importance of the role we play in supporting the recapitalisation and sustainability of the industry.” SA Taxi currently finances more than 26 000 of the estimated 200 000 minibus taxis operating in South Africa and has empowered over 42 000 SMEs.

It is funded both locally and internationally by a diversified pool of debt investors. Sefa is a wholly-owned subsidiary of the Industrial Development Corporation and reports to the department of Small Business Development.

Sefa chief executive Thakhani

Most banks are reluctant to participate in the minibus industry

Makhuvha said many people in the taxi industry were classified as unbankable and had very limited funding channels through which to access capital.

Makhuvha said most banks were reluctant to participate in the minibus industry due to perceived associated risks and limited industry experience.

“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,” Makhuvha said.

“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.” – ANA

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