South African niche credit provider SA Taxi raised ZAR900 million ($60 million) with its first social bond to grow small and medium enterprises (SMEs) in the country's minibus taxi industry.

The bond was issued by Transsec 5, an asset backed securitisation structure administered by SA Taxi and co-arranged by SA Taxi and South Africa's Standard Bank. It is the first issue of the ZAR2.5 billion Transsec 5 programme.

It was issued under SA Taxi's newly established sustainable bond framework, which was developed with assistance from Standard Bank and is aligned with both the UN Sustainable Development Goals (SDGs) and the Social Bond Principles (SBP) as verified by S&P.

The bond's proceeds were used to finance and refinance existing loans to ensure the growth of SMEs in South Africa's minibus taxi industry, while also ensuring that taxis are safe and run by legitimate operators.

The bond was described as an "innovative issuance in the emerging market space" by one awards judge.

"The development of SA Taxi's sustainable bond framework creates an accessible platform for SA Taxi to showcase its sustainable business activities and promote its significant investment in providing access to transport to millions of South Africans every day. Our partnership with SA Taxi unlocked its first social bond issuance, which is listed on the JSE's sustainability segment," said Anneke Lund, executive of sustainable finance at Standard Bank.

Standard Bank arranged the first Transsec programme for SA Taxi in 2014, when it raised ZAR665 million. This latest issue brings the cumulative total raised to ZAR4.5 billion.

As of March last year, Taxi SA had provided credit, insurance and other associated products to 33,640 minibus taxi operators across South Africa who may not have been able to obtain finance from traditional credit issuers.