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 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

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

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

RHLF implementation strategy

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

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

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

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 Monitoring community formation in post- occupancy RDP houses Savings as pre-condition for access to credit and not only subsidy Communal Land Rights Bill