The taxi leadership is taking the threats by banks to cut credit lines for operators serious and are offering to assist in preventing vehicle fraud and defaults of payment of owners’ vehicle installments.
This comes after various banks expressed their concerns that they are not getting any help from taxi associations in preventing vehicle fraud allegedly perpetrated by taxi operators colluding with criminals and vehicle dealer sales staff to defraud banks. Concerns were also raised about the high rate of payment defaults for lease of minibuses.
KwaZulu-Natal SANTACO chairperson, Boy Zondi, cautioned his members at the recent AGM in Durban about the accusations leveled at taxi operators by the banks and their conviction that they’re colluding with criminals to defraud banks.
“The taxi industry leadership expressed concern that banks seem to be pulling back from financing taxis,” said Zondi.
Absa which has a trading book exposure of R3 billon to the taxi industry is among the hardest hit financial institutions, together with Toyota Financial Services. It’s been reported that Absa’s
taxi division is considering tightening its lending criteria and screening of clients in order to manage risk associated with vehicle fraud.
SANTACO and NTA, led by the organisation’s respective presidents Abner Tsebe and Frances Masitsa respectively, have met with banks to find a common ground on how best they can work together to protect taxi operators’ interests and ensure the banks risks are minimised. Following the meeting, the taxi leadership is reported to have tabled a proposal to the affected financial institutions for consideration of their decisions. They also proposed a Close Finance Scheme in which the banks can extend credit facility for taxi industry groups and administer the credit application and collection directly from taxi operators.
