Independent Online

Saturday, December 2, 2023

View 0 recent articles pushed to you.Like us on FacebookFollow us on TwitterView weather by locationView market indicators

New housing finance bank set to open doors

Published Nov 18, 2016


Johannesburg - The South African affordable housing market is set for a major shake-up with the launch of a new state-owned housing finance bank, as yet unnamed, expected to come into operation before the end of next year.

In May, Human Settlements Minister Lindiwe Sisulu said the country still had a backlog of 2 million houses and her department hoped to deliver 1.5 million houses by 2019.

She had said the different housing finance institutions would be consolidated into a bank that would be a catalyst to achieve the departments’ targets.

The new bank will be formed by combining the work of the three financing institutions housed under the Department of Human Settlements, with its entity, the National Housing Finance Corporation (NHFC) taking the lead. The other entities that will be collapsed to form the bank are Rural Housing Loan Fund and National Urban Reconstruction and Housing Agency.

Samson Moraba, the NHFC's chief executive, said yesterday that the establishment of the new bank would assist in providing finance solutions for housing to people employed in the informal sector of the economy.

“We are well on our way to positioning the NHFC as a significant role player in the creation of the new Human Settlements Development Bank... the new entity will broaden the scope of our delivery,” Moraba said.

NHFC was set up 20 years ago to fund housing for low-income earners in the country - those households, which earn in the region of R1 500 to R15 000 a month, also known as the gap market.


The company said it had delivered 4.3 million houses since its inception, benefiting some 20 million people.

Since its inception, the NHFC had disbursed R26 billion in funds to the gap market, with R7.1bn direct, and leveraged R19bn in partnerships with other partners, including the private sector.

Moraba said the impending bank would provide the scale and size needed to address the country’s housing backlog.

Ndivhuwo Mabaya, a spokesman for the Department of Human Settlements, said the consolidation was to pool resources to tackle the housing backlogs in the country.

“The thinking behind the bank was to leverage resources from the department’s three financial institutions and increase the availability of both development and end-user finance for households,” he said.

The bank has yet to be named, but the department currently refers to it as the Human Settlements Bank.

Moroba said the difference between what NHFC was currently doing and what the new bank would do was the scope to reach more people. “Our model would still be used, currently our size doesn’t meet our expansion ambitions.”


Related Topics: