Transaction Capital spins money from taxis
Minibus financier and insurer has been able to show admirable growth rate and increase in dividends in tricky sector
How do you get into the business of financing and insuring an industry as risky as minibus taxis in SA and still make a profit? You own the whole value chain. That’s what minibus financier and insurer SA Taxi has done. The company has been running a profitable venture in an area where most traditional financial services companies are not prepared to play. Transaction Capital bought African Bank’s commercial vehicle finance division in 2006 and renamed it SA Taxi. Since its listing on the JSE in 2012, Transaction Capital — which also owns debt collection business Transaction Capital Risk Services (TCRS) — has achieved a compound annual growth rate of 20% in earnings per share while dividends per share grew by 33% over the same period. Other asset financiers and short-term insurers in SA had much lower compounded growth. For instance, the most recent bank to release that figure, Standard Bank, recorded growth of 13% in the five years to 2018 while SA’s biggest short-term insurer, Sant...
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