JSE-listed Transaction Capital, which finances minibus taxis and collects debt gone bad, proves there is still scope to compete with major banks. Through SA Taxi, the non-bank financial services group has carved out a niche in an area underserved by traditional lenders. This has paid off handsomely. The unit, whose customers do not qualify for bank finance and are therefore charged higher interest rates by SA Taxi, finances 12% of SA’s minibus taxi fleet. These 29,921 vehicles are owned by small- to medium-sized enterprises (SMEs), an area banks are accused of neglecting. "Banks don’t have the resources to operate where we do," Transaction Capital CE David Hurwitz told Business Day on Wednesday. SA Taxi does not rely on traditional credit-scoring metrics. Instead, it uses its own data on taxi routes. When a prospective customer applies for a loan, SA Taxi knows how profitable the proposed route is likely to be. This indicates the ability of the borrower to repay the loan. The size o...

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