1. Annual Integrated Report for year ended 31 March 2016
Presentation to: Portfolio Committee on Human Settlements
Jabulani Fakazi, CEO
and
Bruce Gordon, CFO

2. Outline RHLF mandate Service delivery model
How we create value for people in our mandate
Business environment
2015/16: Performance information
Strategic Oriented Outcomes
Statement of Financial Position
Statement of Financial Performance
Governance: The Board Structure
Concluding remarks

3. Mandate and Core Business
People
Facilitate access to incremental housing finance for low income households in rural areas
Rural
Communal land, rural towns and small towns
Monthly Income
Maximum R15 000
Focus remains on people earning under R3 500

4. Business model Loan requirements Cost of borrowing
Wholesale Lending
Facilities approved for intermediaries
Empowers people to decide what they need/want
Must be repaid
Intermediaries
Carry credit risk
Market and lend to clients / end users
Commercial or non-profit (CBOs)
Loan requirements
Unsecured, so can never lose homes
Ideally disbursed through building merchants
Must be used for housing in rural areas
Cost of borrowing
In accordance with the National Credit Act
RHLF discounts to those who charge less

5. Creating value for people in RHLF’s mandate
Mission: To empower people in rural areas to maximise their housing choices and improve their living conditions through access to housing credit.

6. Used savings and borrowings Matlosana Municipality
RDP
Inherited as
Earns under R10,000
Used savings and borrowings
Matlosana Municipality

7. Ga-Malokela Village, Tubatse Local Muni.
3 July 2015
Ga-Malokela Village, Tubatse Local Muni.
15 June 2016

8. Business Environment Weak economic growth High unemployment
Market overindebteness
Interest rate

9. Strategic Outcome Orientated Goals (MTSF)
Performance against MTSF Targets:

10. Strategic Outcome Orientated Goals (2015/16)
Stakeholder Perspective – Broaden and deepen the reach of rural housing finance

11. Strategic Outcome Orientated Goals
Financial Perspective: Real capital preservation

12. Strategic Outcome Orientated Goals
Business process

13. Strategic Outcome Orientated Goals
Learning and growth

14. Statement of Financial Position

15. Statement of Financial Performance

16. Cash flow statement

17. Governance: The Board Structure
DIRECTORS
BOARD OF
REMUNERATION COMMITTEE
HR ETHICS and
CREDIT AND DEVELOPMENT
COMMITTEE
AUDIT AND RISK
MOI provides for a maximum of 8 directors (7 NEDs & 1 ED)
Currently only four Non-Executive Directors
Vacancies are not being filled because of pending merger

18. Governance: Audit Report
Opinion
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Rural Housing Loan Fund SOC NPC as at 31 March 2016 and its financial performance and cash flows for the year then ended, in accordance with Generally Recognised Accounting Practices and the requirements of the Public Finance Management Act of South Africa and the Companies Act of South Africa.
Emphasis of Matter
Without modifying our opinion we draw your attention to note 3 of the annual financial statements. This note indicates the merger of the Rural Housing Loan Fund SOC NPC with two other Development Finance Institutions, note 3 also indicates that this condition indicates the existence of a material uncertainty which may cast significant doubt on the company’s ability to continue as a going concern.

19. Challenges Challenges:
Decrease in affordability by end users as shown by lower borrowing, though there seems to be a slight turnaround happening here
Over 70% of loans issued by a single intermediary.
Measures to address challenges:
RHLF is assisting with affordability by helping intermediaries reduce interest charged to retail borrowers
RHLF is developing 3 start-ups in:
Maluti-a-Phofung
Makhuduthamaga
Mahikeng

20. Performance Q1 2016/17

21. Concluding Remarks
RHLF achieves its mandate within the constraint of its funding resources as well as the challenges faced by the economy
Target market is huge and more needs to be done to significantly increase market coverage
Tough market conditions and high level of indebtedness pose a challenging outlook
RHLF business model resonates with active citizenry advocated in the NDP—people drive their building process and improvement of their living conditions