Housing in Southern Africa July 2016

board member

does deserve another chance.” The NHFC’s deal with mining gi- ant Implats to provide home loans to mining employees was one of the highlights. “The 2 000 housing pilot project with the mining house was an overwhelming success. The global financial market subsequently went through a meltdown and employers faced financial challenges.” The Finance Linked Individual Sub- sidy Programme is another product that had the potential to really make an impact and deliver housing in the Gap market. This is householders earning too much for fully subsidised housing and not enough to qualify for entry level housing. “A key factor was the decision to allocate FLISP funds to the provinces, and it was a long and arduous process before the

NHFC received these funds. Govern- ment does not have to create new money, it simply needs a new piece of legislation to channel FLISP funds directly to the NHFC. It requires a streamlined approach. Banks are effi- cient institutions and FLISP subsidies would increase the number of hous- ing opportunities in the low income market.” The state-owned entity has weatheredmany storms, scaleddown and retained key staff members and has a strong balance sheet. “The NHFC is on the brink of being conferred with much greater respon- sibility to incubate other previously funded DFIs of Human Settlements. We are comforted that the Minister is now impatient to make this happen and quicken the pace of delivery,” concludes Tati.

for that product.” He added, “The Mortgage Default Indemnity Scheme, a guarantee scheme to cover banks from defaults in the housing sector stopped short partially due to the initial capitalisation that was not forthcoming from Treasury. Once again the product was ahead of its time and Treasury had other pri- orities. My personal belief is that the programme would have taken off if all the parties were involved. This requires capitalising it properly, going back to Treasury to ensure that it is adequately funded andwe could then achieve four times the impact, than going it alone as NHFC. The banks would have then extended funds to more people, when banks retreat this is the first market that is affected. The Mortgage Default Indemnity Scheme Eric Molobi, NHFC’s first cha i rperson and i coni c b u s i n e s s ma n , i n t h e Chairman’s Report in 2001, stated ERIC MOLOBI “ When the National Housing FinanceCorporationwas formed five years ago, born out of the dire need to address the critical short- age of housing in South Africa, our mission was clear – to create housing opportunities for low and moderate income families. The demand for housing in South Africa was, and remains, enormous particularly in the low and moderate income com- munities. The mainstream financial insti- tutions either lacked the capacity to address these demands or were unwilling to do so because of the per- ceived high-risk nature of thismarket. The challenge to the NHFC was thus to find innovative ways of addressing the needs of the market. In our first five years of operations NHFC has risen admirably to this challenge, albeit not without some setbacks. The NHFC set about nurturing a client base that would have the capacity

The Eric Molobi in novation Hub

commitments, to the causeof housing and the corporation.’ Established in 1996, the NHFC report in 2001 showed that there had been consistent growth at the state- owned entity from the outset. Grow- ing its advances towell over R1 billion, which in itself is highly commend- able, loans approvals rose to almost R115 million in 1997 to R1,36 billion in 2001. Over the first five years, loans worth R1,3 billion were advanced to 53 clients, to provide 486 980 end user loans and create 67 451 housing opportunities.

to begin to make a dent in the enor- mous and innovative mechanisms to ensure sustainable delivery and a ‘win-win’ situation for our client, ourselves and, of course, themillions of South African families previously denied access to housing finance.” Eric Molobi, NHFC Chairman’s Report, in 2001. He served as Chair- man from 1996-2006. The NHFC Annual Report in 2006, in memory of the late Chairman stated: ‘His love for the people and the desire to improve their well-being led him to contribute tirelessly, in spite of his numerous

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