Jan 15

Written by: Pete Simms
Friday, January 15, 2010 

SA Taxi Finance (SA Taxi), the only financial institute in South Africa that is focused exclusively on financing the taxi industry, has been assigned a primary and a special Servicer Quality (SQ) rating of SQ3 rating by Moody’s Investors Service.

SA Taxi is a dynamic financial institution based in South Africa using innovative funding and origination methodologies to ensure that entrepreneurs in the taxi industry are offered equitable access to affordable finance for the new, safe and compliant taxis.

Says Martin Bezuidenhout, chief executive of SA Taxi: “This rating is a step in assuring our ability to provide significant, affordable loan finance to the taxi industry particularly to those currently excluded from being able to access finance from the traditional banks. This will enable operators to obtain new, compliant taxis ensuring that the commuting population has access to safe, reliable and affordable transport.”

Two other firms in South Africa have a Moody’s SQ Rating. In particular, the 24-page Moody’s report pays tribute to SA Taxi’s forward looking strategy, experienced managers, pro-active insurance management system and close monitoring of its delinquent portfolio. Other attributes commended by Moody’s are SA Taxi’s reporting capabilities, recoveries procedures and its ISO 9001 accreditation.

The SQ3 rating applies to SA Taxi’s servicing quality of finance leases secured by taxi vehicles in South Africa. According to Moody’s, its Servicer Quality ratings are “opinions regarding the ability of a loan servicer to effectively prevent or mitigate losses in a securitization” and that its approach “evaluates how effective a servicer is at either preventing defaults in the first place or maximizing the recoveries to a transaction when defaults do occur.” The rating scale ranges from SQ1, the strongest, to the weakest mark of SQ5.

Moody’s acknowledges that since the beginning of 2009, SA Taxi has introduced various initiatives, ultimately aimed at strengthening its servicing platform but that whilst these programmes are generally positive, the overall sustainability and impact of these enhancements have not yet been demonstrated over a sufficient period of time.

These initiatives are specifically designed to counter some of the challenges expressed in the Moody’s report including: training infrastructure, quality assurance systems, increasing delinquent accounts as well as poorly integrated IT system.

Moody’s also highlights the additional pressure applied to SA Taxi due to its funding requirements to meet aggressive growth targets.

“The ability to raise funding is central to the public private partnership which is a co rnerstone of the taxi recapitalization initiative of the Government,” concludes Bezuidenhout.

Issued by Brunswick South Africa on behalf of SA Taxi

Notes to Editor

SA Taxi Finance (Pty) Ltd (“SA Taxi”) is South Africa’s leading provider of finance to the taxi industry, having financed the businesses of almost 20 000 taxi operators over the past 12 years.

To fulfill its role, SA Taxi employs its own equity as well as raising funding through appropriate structures, including Moody’s Aa2ZA rated debt instruments which have been issued directly to leading financial institutions.

SA Taxi views its societal role as an enabler of affordable, safe transport to the 15 million commuters who travel the roads of South Africa in taxis every day and a contributor to the financial empowerment of taxi owners who in turn are providers of employment to over 400 000 drivers, rank managers and providers of associated services.