Challenge
South Africa has one of the highest rates of economic inequality in the world, with a poverty rate of more than 55 percent and significant racial disparities. Black South Africans comprise 80 percent of the total population but own just 34 percent of the country’s SMEs. Unequal access to transportation compounds the overall inequality, with many black communities located outside of cities and removed from job opportunities and social services. Less than 15 percent of rural South African households own a private vehicle, leaving them dependent on an inadequate public transportation network and limiting their economic opportunities.
Solution and Impact
DFC loans are helping SA Taxi Impact Fund expand lending to black-owned and -led SMEs that operate minibus taxis across South Africa. These small buses provide affordable door-to-door transportation along fixed routes. SA Taxi’s business model integrates services such as repairs and refurbishments, insurance, and data analytics to help bolster the success of its borrowers.
Since its inception, SA Taxi has provided loans to more than 100,000 new black-owned small and medium enterprises, more than one quarter of which are women-owned. These SA Taxi-funded businesses are extending transportation access to predominately black communities in rural areas without traditional bus or train services.