Presentation to the National Council of Provinces

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Presentation to the National Council of Provinces

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mortgage and non- mortgage products (loan discounting and purchasing from lenders, direct ... Support management capacity of niche lenders ... – PowerPoint PPT presentation

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Title: Presentation to the National Council of Provinces


1
  • Presentation to the National Council of Provinces
  • 12 JUNE 2002

2
Agenda
  • Mandate and Mission
  • NHFC Context (as Gazetted)
  • NHFC Primary Responsibilities
  • The External Environment
  • The Housing Finance System - SA
  • The Housing Institutional Environment
  • Strategies and Action Plans
  • Conclusion

3
Mandate
  • In partnerships with the broadest range of
    organisations, to search for new and better ways
    to mobilise finance for housing, from sources
    outside the state...
  • The corporations endeavours should in time
    ensure that every South African with a regular
    source of income can gain access to finance for
    buying or renting or incrementally building or
    improving his/her own home

4
Mission
  • The NHFC seeks to create housing opportunities
    for the low and moderate income families by
  • Funding or Underwriting the funding of
    intermediaries and institutions to promote
    broader access to housing and housing finance
  • Facilitate the building of Adequate and
    Sustainable capacity within the organisations and
    institutions that it funds
  • Partnering organisations and institutions to
    deliver innovative housing finance solution
    options

5
NHFC Primary Responsibilities
  • Stimulate the Primary and the Secondary market
    in the low and moderate income housing sector
  • Provide alternative need- based housing finance
    products and financial packages-
  • mortgage and non- mortgage products (loan
    discounting and purchasing from lenders, direct
    intermediary funding)
  • rental product options (project financing for
    rental or rent to buy and installment sale)
  • provide credit to lower income earners building
    or developing properties incrementally
    PHP, individual initiatives and through rapid
    land release (generally micro-finance)

6
NHFC Primary Responsibilities
  • Undertake the funding as a wholesale
    intermediary and act as a fund manager
  • Specialise in identifying, assessing, pricing,
    monitoring and managing the risks associated with
    the placement of funds
  • Research and Product development

7
NHFC Primary Responsibilities
  • Stimulate the Primary and the Secondary market
    in the low and moderate income housing sector
    (contd.)
  • On-going product development
  • Support management capacity of niche lenders
  • Promote and develop partnerships with financial
    institutions and other stakeholders to improve
    financing capacity to income groups

8
Overview of the Operating Environment
  • External Environment
  • Shrinkage of the housing finance delivery
    channels into the NHFCs target market
  • Demise of small banks Saambou, Unifer, FBC, etc.
  • Market Consolidation e.g. Cashbank
  • Inadequate capacity of niche lenders to
    take-over the increased gap to finance
  • Negative impact of Unemployment and HIV/AIDS
  • High-risk perceptions of the Low and Moderate
    income financing sector Cost of funds high

9
Overview of the Operating Environment
  • External Environment(contd)
  • Housing Policy HLMDA, CRA and evolving policy
    on Social Housing
  • Zero Transfer duty on less R 100 000 house value
    and
  • Stamp duty abolished for certain mortgage
    transactions between institutions
  • Stability of some of the niche lenders in long
    term funding emerging
  • Alternative tenure options for the end
    beneficiaries

10
The SA Housing Finance System
Capital Markets (Banks, Investors, Life/Pension
Funds
Parastatals (other DFIs)
Govt
REGULATION
Loan secured by property, lower LTV ratios
Non Mortgage Security
Lending Institutions
BANKS
NON- BANKS
NGOs
LOAN ORIGINATION
Subsidy Beneficiaries
LOAN SERVICING
Depositors
Borrowers
11
The Housing Institutional Environment
Funding or Guarantee the Funding
Own
Financial intermediary
Rent
RURAL HOUSING LOAN FUND
Rural Micro-Finance
Capacity Building
SOCIAL HOUSINIG FOUNDATION
Mobilisation of Construction Funding
NHBRC
Ensure Quality Housing
DEVELOPER (Bridging Finance)
End-user Guarantees
NURCHA
Stabilising the Housing Environment
Servcon
THUBELISHA
Property in Possession
Right sizing
12
Strategies and Action Plans
  • Prudently, grow the lending business of the
    Corporation and thus improve on its housing
    delivery impact
  • Increase the number of housing institutions and
    lenders across all Provinces
  • Facilitate the development of capacity of
    Housing Institutions, Primary and Niche Lenders
    (Standards and Guidelines)
  • Continuously enhance the Risk Management capacity
    and competency of both the NHFC anud or clients
  • Accelerate the medium density housing
    development thru the Job Summit Social Rental
    Housing Project
  • Continue to pilot pragmatic PPP models that will
    deliver
  • Affordability
  • Value for Money, and
  • Risk Sharing
  • Proactively undertake Housing Finance Research
    and Product Development

13
THANK YOU
14
QUESTIONS
15
Undertaking Wholesale Funding
NHFCs Performance
16
NHFC Housing Impact TO-DATE
NHFCs Performance
HOUSING IMPACT TOTAL TO DATE
Complete housing units financed 80, 397
Incremental housing loans granted 489 480
Number of people benefited 2,47 million
17
Budget Highlights
  • Priorities of the Corporation
  • Prudently, grow the lending business of the
    Corporation and thus improve on its housing
    delivery impact
  • Continuously enhance the Corporations Risk
    Management capacity and competency
  • Attain accelerated delivery on the Job Summit
    Pilot Project
  • Effectively implement the Corporations processes
    and systems Drive Speed, Flexibility and Impact
  • Focus on the need to challenge, develop and
    retain the best people in the Corporation
  • Improve the Corporations Marketing and
    Communication with all its Stakeholders

18
Budget Overview 2002/5
  • Deliver housing finance to a cumulative total of
    334,000 households (of which 30,500 new and
    7,500 existing houses) in most provinces
  • Facilitate the building of capacity in the
    housing and housing finance sector by supporting
    11 new and emerging housing finance
    intermediaries and housing institutions
  • Change the housing finance environment through
    promoting new loan products, relevant delivery
    channels, supporting appropriate regulatory
    policy frameworks and new housing options.
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