R20.7 Million debt relief for the taxi industry
It has been over a year since the announcement of the official South African Level 5 Covid-19 lockdown. With many people having to adjust to what has been the new normal, the world was at a standstill.
The pandemic adversely affected most industries and as a result, companies could not succumb to the pressure of the nationwide lockdown but had to find new ways to assist employees and clients as key stakeholders to their businesses.
Big corporations started initiatives to help take off financial pressure from clients using campaigns and initiatives that were aimed at helping clients stay insured, helping businesses to keep their doors open and also providing PPE to medical professionals amongst other things. For businesses, some banks provided small and medium-sized businesses with a loan instalment relief of 30 days.
Such payment holidays were key to ensuring sustainability for many industries but qualification criteria weren’t always favourable to some, the taxi industry being one of them. As the lockdown continued throughout the year, a need for more innovative ways to ensure sustainability had to be introduced.
The taxi industry, which is run by taxipreneurs (businessmen and women who run a taxi business), has a responsibility to offer safe and reliable transportation to the broader population daily and currently has over 250,000 minibus taxis on the road, which transport 66.5% of commuters in South Africa. In terms of its contribution to the South African economy, the industry is estimated to generate ~R50 billion annually and spends ~R20 billion on fuel a year.
With regulations and capacity limitations put in place for this essential service, the industry called for help as more had to be done to relieve taxipreneurs from financial constraints.
Over and above the 30 days payment relief offered to its clients in April 2020, SA Taxi has also introduced an incentive scheme in which selected taxipreneurs who are currently in arrears are incentivised to increase their payment efforts, reduce arrears and get them one step closer to owning their vehicles.
The qualifying criteria for the scheme is assessed on an individual basis looking at payment history of the past three months. The majority of the financial assistance ranges in the value of between R1000 and R5000, depending on the payment performance of the individual taxipreneur.
More than R20.7 million has already been used to aid the industry to reduce arrears for SA Taxi clients. The total monthly incentive opportunity is estimated at R36 million, with this, the company continues to encourage more customers to engage with them and find out more about how they can help reduce their arrears balances and get closer to owning their vehicles.
