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RURAL HOUSING LOAN FUND

RURAL HOUSING LOAN FUND. Sustainable Shelter. RHLF set-up. Incepted in September 1996 as a Section 21 company Help address the housing needs of rural poor > 2MLL currently R 4 150 Assist with financial sector development in rural areas advocated by Straus Commission

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RURAL HOUSING LOAN FUND

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  1. RURAL HOUSING LOAN FUND Sustainable Shelter

  2. RHLF set-up • Incepted in September 1996 as a Section 21 company • Help address the housing needs of rural poor > 2MLL currently R 4 150 • Assist with financial sector development in rural areas advocated by Straus Commission • Independent board appointed by the Minister of Housing • Capitalised with grant from German Development Bank,KfW • To date no SA government funding; limits RHLF’s ability to raise additional funding

  3. Core Principles • Wholesale Housing Finance to viable Retail Lenders • Targets poor households • Supports incremental housing construction & improvements • Targets Rural Areas • Promotes non-use of asbestos products

  4. Where is RHLF today? • A social venture capital fund with strategic focus on rural markets • Invest in the development of a formal rural housing credit delivery process • Deliberately focus on the working poor • Achieved financial sustainability by: • Investing in markets where others have feared to • Managing risk and building capacity with MDF and PSN • Investing in a diverse portfolio of clients and loan products

  5. RHLF implementation strategy

  6. Definition of Housing • Progressive process due to affordability • Creating additional living space • Improving peoples living conditions • Productive housing • Active building materials industry

  7. Major Achievements • Committed R 211 m; Disbursed R 220 m • Annual disbursements R 60 m – 34% ahead of budget • Distribute end-user education material • Support capacity building with MDF and PSN

  8. Supply side constraints • Monitoring the implementation of CRA in rural areas • Banks reduced number of rural branches • Shrinking formal sector

  9. Demand side constraints • Access to persal • Monopoly of banks over collection mechanisms • Legislating payroll deduction for housing • Housing benefits for public officials who want to invest on communal areas • Usury Act and meeting the gap > R 10 000 • Monitoring community formation in post-occupancy RDP houses • Savings as pre-condition for access to credit and not only subsidy • Communal Land Rights Bill

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