RURAL HOUSING LOAN FUND Portfolio Committee on Housing Presentation 10 May 2006

Above is the home of the Nyalunga family in Lydenburg Extension 6. Towards the back is an original RDP house that the family received in 1996 and that has been extended one room at a time. The Nyalungas started by stockpiling building material and built the foundation themselves. They took four successive loans amounting to R22, 000 from RHLF retail partner Indlu to buy bricks, tiles, door and window frames and to pay for labour.

RHLF’s Vision Statement RHLF is a world class rural social venture capital fund that creates new financial arrangements and opportunities for rural families to improve their housing, economic and living environments.

RHLF implementation strategy

Presentation at Finmark Trust Forum 28 March 2006; Illana Melzer

RHLF’s contribution to “Peoples Contract to Create Work and Fight Poverty” Establish credit histories & repeated access to credit PPP with intermediaries creating jobs within housing finance value chain Stimulate local economic development using local builders in construction Enable access to public utilities Supporting the BMS industry create jobs in the industry and related industries Linking “second economy to first economy”

More Housing, more impact at lower cost of credit Strategic Directions: Back to the housing basics (more impact, better payment behavior) Efficient delivery: scale, back-office concentration, smart use of technology Expand into the “gap” market: larger non-mortgage housing loans (R10 -30k), longer tenors (~ 36 months) Lower TCOC

More Housing, more impact at lower cost of credit Selected Strategic Initiatives: Savings Linked Housing Credit –Stokvels, Village Bank, Blue Dot Rural Housing/Wizzit Cell phone banking Community-Based Loan Origination –Emerging farmers and farmworkers Alternative Building Technologies –Possible changes in Rural Subsidy, alternative building technology supports environmentally friendly housing Rural Worker Housing –Cooperate with employers on agri-village development Link with Building Material Manufacturers –Link “second economy to first economy” Leveraging Housing Subsidies with RHLF top-up credit New Conventional Wholesale Clients –Alternative distribution channels, incremental housing.

Commitment to BEE Four distinct strategic thrusts –Demand driven developmental needs of end-users –Funding black owned and managed companies –Warehouse RHLF shares for future acquisition –Employment equity

West Coast DC Northern Free State DC Sisonke DC Francis Baard DC Kgalagadi Sisonke DC DPLG listed Rural Nodes Other Rural District Councils RHLF development impact in ISRDS April 2005 to March 2006 (Annualised) Loans in 17 Rural Nodes Number of loans Value of loans disbursedR 7.9 m

Employment Equity

RHLF’s response to Key Environmental factors Financial Sector Charter – Constructive engagement with banks, funding of clients reaching RHLF’s maximum exposure limits Land and Agricultural Policy – Share experiences in micro- finance for housing with Mafisa National Payment System and Competition in Banking Sector – RHLF made representations to SARB and PASA New National Credit Bill – bigger loans and longer terms at lower cost to borrower

Board of Directors

Thank You