Verdant closes $10.5m to finance minibus taxi industry in South Africa
Bridge Taxi Finance, a development company that provides finance and support products to the minibus taxi industry in South Africa, has secured $10.5 million from impact investors with the help of Verdant Capital. This support includes strategic investments and partnerships in various sectors within the developmental finance chain, such as taxi finance, logistics, credit solutions, parts supply, and vehicle servicing.
The funding, from Dutch firm Triodos Investment Managers, represents an initial step in a growing pipeline of international development finance and impact investors seeking to collaborate in financing Bridge Taxi Finance. More so, the funding is part of the Common Terms Agreement (CTA) structure, which simplifies and standardizes security sharing among like-minded investors.
This transaction marks the introduction of a simplified investment structure for international impact investors looking to participate in South Africa's inclusive finance sector. Verdant Capital serves as the exclusive advisor to Bridge Taxi Finance, assisting in attracting longer-term international capital to support their initiatives.
The taxi industry in South Africa is a crucial component of the country's economy, responsible for more than 70% of all public transport trips. It serves as the most widely used form of public transportation in Africa - over 15 million South Africans rely on minibus taxis for their daily commute to and from work. Bridge Taxi Finance's clients are taxi drivers who operate and own their taxi businesses and it currently provides financing to over 4,700 entrepreneurs in the industry. In South Africa, there is a substantial monthly supply gap for minibus taxis, with an estimated 250,000 to 280,000 operating on formal routes. Bridge Taxi Finance is addressing this supply gap by importing new and safer vehicles that meet EURO IV and V emissions standards, contributing to improved transportation and safety standards within the industry. The company's offerings help finance financially excluded individuals, offering them the opportunity to own income-generating assets, which, in turn, allows them to make a positive contribution to the economy.