Housing in Southern Africa July 2016

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formally or informally employed, could not access housing credit. Recognising this gap in the market theNHFCwas taskedwith findingnew ways tomobilise and broaden access to housing finance. It was widely accepted that not everyone was able or keen to buy a house and, increasingly, low income families were opting to rent. A num- ber of initiatives were implemented to establish alternative lending institutions, and this contributed to the growth of non-banking retail financial intermediaries. Another challenge facing the corporation was its inability to influence pricing by its retail intermediaries on loans to the end user, at a time when interest rate levels were at their highest. With the rapid growth of themicro finance sec- tor, there was a need for appropriate regulation. As use of micro finance instru- ments for housing credit grew, so did the number of institutions it funded. The risk exposure also grew significantly and needed to be man- aged more vigorously. NHFC Initiatives The NHFC facilitated the creation of the Social Housing Foundation in December 1997. The Housing Institu- tions Development Fund (HIDF) was designed to provide capital at below market rates to establish viable start- up social housing institutions. Gateway Home Loans was estab- lished in 1998, as a wholly-owned subsidiary of NHFC, todeliver housing at scale in the Gap market for homes between R25 000 and R60 000, and

had to run a business in such a way that we earned amarginwithout hav- ing to goback to government for fiscal allocation. That is why there would always be in depth engagements at Board level seeking to balance devel- opmental and sustainability impera- tives of the NHFC,” says Moraba. Chairperson Eric Molobi was appointed by Joe Slovo NHFC’s First Steps In 1996, theNational Housing Finance Corporation was established with four key divisions: • Niche Market Lenders – debt fund- ing to intermediaries • Housing Equity Fund – providing technical assistance and start-up capital for new and pilot ventures • Housing Institutions Development Fund – providing development capital to viable start-up social housing institutions • Rural Housing Loan Fund – to enable low and medium income households in rural areas to maxi- mise housing by providing loans for building and renovations The Challenges The lowest end of the market was being served by government’s pro- vision of delivering a fully subsi- dised Reconstruction and Develop- ment Programme (RDP). But, low to moderate income earners, whether

to promote the secondary home loan market process in the low income housing sector. The Presidential Job Summit Pilot Project held in October 1998 identified the need for a National Presidential Lead Project (NPLP) on rental housing at sufficient scale to pilot mass housing delivery and al- ternative forms of tenure. The pilot project would provide a minimum of 50 000 units and a maximum of 150 000 houses. This included 75% permanent rental units and 25% for ownership. A partnership between govern- ment, the private sector, the Depart- ment of Housing, National Treasury, the Banking Council of South Africa, Labour and the NHFC would roll out 15 000 units to be developed in Durban, Witbank and Johannesburg.

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