RURAL HOUSING LOAN FUND

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 gt
  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 RHLFs
  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 gt 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