SA Taxi were seeking to syndicate a ZAR 1,700m senior tranche out of a total ZAR 1,925m loan program. A reduced risk appetite in the international and local market meant that an initial ZAR 635m was placed with the DFI community. The financing was arranged by FMO and Transcapital, with participations from GuarantCo and ICF. Investec Bank participated with a further ZAR 120m of mezzanine financing.
South Africa, being an upper middle income country, would not normally qualify for support from GuarantCo. However, given the pro-poor nature of the financing and SA Taxi’s inability to access the local markets following the financial crisis, GuarantCo obtained special approval from its shareholders to support the financing.
The South African taxi (minibus) industry employs an estimated 150,000 taxis and many more individuals, directly and indirectly. The industry is a critical part of the country’s transportation network, especially in the disadvantaged suburban areas. 78% of all non private journeys in S Africa are made in minibus taxis.
SA Taxi Group, the leader in taxi finance, has provided seed capital to at least 19,500 broad based black SMMEs (all of whom are previously disadvantaged individuals).
SA Taxi is also critical to the government’s Recap program that aims to improve the operations and regulation of the previously chaotic and at-times violent minibus taxi industry. The Recap program will also result in improved emission norms and passenger safety standards.