Cooperative drives change, land rumors and reform, NYQM and upcoming events!

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Driving Change Together

In Focus readers will remem­ber the innovative Sihlangene Bus Company in Richards Bay, KwaZulu-Natal, organized when two taxi cooperatives (Nhlabane and Mbonambi) entered into an agreement with the black-owned Trans-Tugela Bus Company. (“Sihlangene” means “We are Together.”) When I visited the company in August, Sihlangene had already progressed to the next stage of its business evolution. Having received a loan for ZAR 25,093,168, with the help of a Shared Interest guarantee of ZAR10,000,000, the company purchased the 24 buses it needed to service the rural route awarded by the govern­ment. The program is part of the transportation transforma­tion plan to bring peace (in a region formally plagued by taxi wars), security and inclusion to the industry.

“The real difficulty was in the beginning,” recalled Florence Gumede. Sihlangene needed credit to buy busses to deliver the services required. This was not easy. “Nobody wanted to touch us,” she explained. “All we had was the contract.” Help came in the form of Shared Interest’s guarantee for 37.3 percent of the loan. In addition, the bank required security from the Gumedes’ company Trans-Tugela. “My husband had to go to the bank,” Florence added. “He stayed the whole day, signing paper after paper to show he would be a guarantor. They said they couldn’t approve the deal without his signatures. I had to take him food.”

“Without those guarantees,” said Florence’s daughter Mpume, “Sihlangene was not going to kick off.”

Ahead of Schedule

After only two years in opera­tion, Sihlangene had worked with the lender (ABSA Bank) to secure permission to repay its loan in three years instead of the original five – and is now looking to repay it even earlier. The company has already repaid R17 million of the original R28 million loan. Not only is the business doing well, but Sihlangene is looking to rid itself of its interest charges. Moreover, as the business flourished, demand soared. “The buses were overloaded, as the communi­ties have grown, and re­quested more service,” noted Mpume Cele, the company’s young administrator. And so Sihlangene needed to pur­chase four more (second hand) busses. It was able to do so with a Standard Bank loan at a 9.5 percent interest rate – without a guarantee. Sihlangene has become “bankable.” Mpume maintained that one of the keys to Sihlangene’s success has been to have a common goal. “Why fight,” she asked, “when we can work and succeed together…our long-term goal is to obtain more routes, more contracts and jobs for our communi­ties.” The two taxi associa­tions and the bus company service the same rural areas – providing clients with different transportation options. They pool their profits, which in turn pay participants dividends.

In two short years, the company has provided far-flung rural communities with safe, affordable trans­portation to work, school, and urban areas for the first time. In April, Sihlangene reported 108,750 bus fares. In June (when there were fewer holidays), the number rose to more than 132,000.

Women in the Drivers’ Seat

The company is also begin­ning to create precedents and a platform for the generation to come.

“We would like to see women becoming leaders in the taxi industry,” reported Lunji Shandu, a 32-year old Nhlabane Cooperative member (and mother of a seven-month old baby and a thirteen-year-old). “We want to create opportunities, and change people’s perception of the business.”

The Nhlabane Cooperative’s 45 memb