Housing in Southern Africa July 2015

Deals

SAVINGS SCHEMES During 2000 to 2003, NURCHA intro- duced innovative products including Savings Schemes with community associations. This programme en- couraged housing beneficiaries to save R600 each in community saving schemes in order to leverage state subsidies for end-user housing and it received support from the National Department of Human Settlements (known then as the National Depart- ment of Housing). The programme allowed benefi- ciaries to jump the housing queue if the beneficiary was prepared to save R600. Gqwetha says that NURCHA drove the process and the savings schemes proved successful. It showed a willingness by communities and housing beneficiaries to pay for ac- commodation and also to resolve their own problems. A significant number of houses were built during this period and NURCHA truly ful-

filled its mandate. Government had a change of policy, which required beneficiaries to save R2 479. This was beyond what most people could afford. It became increasingly diffi- cult to recruit communities into the programme and encourage them to save for their own homes. It was the demise of the savings schemes. At provincial level housing of- ficials ignored the savings element and simply allocated housing to beneficiaries. NURCHA received the signal that the savings schemes were not producing the housing volumes that government wanted to achieve. Instead of being encouraged to save and solve their own housing prob- lems, beneficiaries just wanted to get in the queue for government housing. AFRICAN BANK Another key catalyst during this period of NURCHA’s history was the

partnership with the African Bank. The bank took the risk of lending to contractors while NURCHA pro- vided guarantees in the event that a contractor defaulted. Gqwetha says that African Bank became a sig- nificant player in the sector andmade huge strides in financing delivery of 22 000 houses. Then disaster struck: interest rate hikes, quality issues with housing, the administrative is- sues of Housing Board. The result of these combined challenges was that contractors defaulted on payments to the African Bank. It was a disaster as NURCHA experienced one of its biggest losses when it had to honour guarantees. African Bank also took massive losses, causing it towithdraw from the sector. GUARANTEES The African Bank saga was a sig- nificant learning curve as NURCHA no

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