Taxi sector briefed on new bank

TRANFORMATION: The ECTTC, based in East London, visited the Chris Hani area to inform public transport industry role players about the pending establishment of a co-operative bank to help finance them, led by its CEO, Dr Nokuthula Mbebe Picture: ANDISA BONANI

The Eastern Cape Transport Tertiary Co-operative (ECTTC) hosted an information-sharing session with public transport industry role players in the Chris Hani area about the imminent establishment of a co-operative bank, at the Queens Casino and Hotel last week.

The bank, which is set to be in full swing next year, will benefit taxi and bus owners by financing them, since the majority have a low credit score and are usually rejected by financial institutions.

ECTTC chief executive officer (CEO) Dr Nokuthula Mbebe, indicated that the purpose of the co-operative bank was to introduce those in the public transport industry to the mainstream economy, where they would no longer depend on transporting people as their sole means of making revenue.

We also want them to own the value chain of the industry they are in. They need to be in the businesses of owning fuel stations, selling car parts and the likes, so that their revenue circulates around them.”

Mbebe said the establishment of the bank would assist in financing the public transport industry role players when they needed to purchase vehicles for their operations.

Taxi owners usually have a low credit score because they get their money in cash and spend as such, thus eliminating cash flow in their bank accounts. This disables them from getting to buy vehicles because they are rejected by financial institutions. They end up being financed by those with high interest rates, leading them to not affording payment and having their assets repossessed,” she said.

The CEO said the aim was to formalise the public transport industry so that participants may become entities that could also be contracted by government.

We are also looking for the industry members to use the labour relations act when employing drivers so they may get benefits and payslips as employees. We have already started with this in some areas, some have medical aid schemes and pension funds which they were not eligible for previously.”

Mbebe said the bank would drive the transformation of the public transport industry for the betterment of the livelihood of its role players, and that it was important for them to join the lower structure co-operatives to benefit from it.

Queenstown Uncedo Taxi Association chairperson Sandi Mgobo said the establishment of the bank would yield much-needed assistance for taxi owners and drivers.

We really need financial support for the men and women in our industry, but that needs to be preceded by finance management workshops so that members are empowered and taught how to handle money. I have spoken to Mbebe about this in our recent meeting and told her how our industry can be transformed so that there is development and members are able to put food on the table.”

Officials from the provincial department of economic development and the national treasury department which are in support of the bank and will finance it, also made presentations for the industry players about their involvement.

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