Project detail - SA TAXI DEVELOPMENT FINANCE PTY LTD

Who is our customer

SA Taxi Development Finance Proprietary Limited (“SATDF”) is a subsidiary of SA Taxi Holdings Proprietary Limited (“SA Taxi”). SA Taxi is a specialist in SME financing in the minibus taxi industry, providing capital to taxi owners to build their own small business. SA Taxi provides asset-backed financing and insurance for the taxi vehicle, an income generating asset, as well as allied services that support these small business entrepreneurs in building sustainable and profitable businesses. SA Taxi enables and empowers these entrepreneurs as many of them are unable to access capital through traditional finance providers. In South Africa, minibus taxis are the dominant mode of public transport with 67% of all households using minibus taxis daily to go to work, school, and the university. SA Taxi’s financing activities are an important catalyst for empowerment and development of start-up SMEs in South Africa and has facilitated the creation of over 85 000 black-owned SMEs that typically could not gain access to finance from traditional lenders. In addition, SA Taxi’s fleet has created over 150 000 direct jobs and 255 000 indirect jobs, since inception. SA Taxi further provides a means of empowering females and the unskilled youth to be able to enter the formal economy.

What is our funding objective?

In March 2020, in response to the COVID-19 outbreak, strict lockdown measures were implemented in South Africa, impacting minibus taxi operators. Lower volumes of commuters left many SME owners with lost business, and unable to honour financial commitments, including debt. As a result, SA Taxi provided interim relief measures to support its qualifying clients, who were in good standing. This financial relief provided to customers meant that collections received were significantly lower in the relevant periods compared to pre-COVID-19 numbers, resulting in SA Taxi seeking access to additional liquidity during this time. FMO’s new facility has been consummated as a result of the Covid-19 pandemic and the resultant impact it has had on SA Taxi’s customer base and its cash flows. It renews our commitment to our longstanding partner and will strengthen SA Taxi’s liquidity levels contributing to the sustainability of the business.

Why do we fund this investment?

Since 2010 we have contributed to the growth of SA Taxi’s impactful and increasingly integrated group, that provides an offering to an underserved, yet imperative segment in the South African society. Moreover, through this loan, FMO continues to contribute to safe and affordable transportation in South Africa, while supporting the creation of sustainable and productive SMEs.

What is the Environmental and Social categorization rationale?

This facility has been categorised as Category C in accordance with FMO’s Sustainability Policy. The leasing activities of the company, which are purely focused on minibus taxis and light commercial vehicles, do not create any exposures in high risk E&S sectors.

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Date	Total FMO financing
11/27/2018	USD 11.50 MLN
6/16/2022	USD 10.00 MLN
2/9/2022	USD 10.00 MLN