1. SELECT COMMITTEE
PUBLIC SERVICES
7 SEPTEMBER 2005

2. A (VERY) BRIEF HISTORY Founded: 1995
JV: SA Government and SEDF (OSI) (Now Public Entity)
Task: Attract banks back to low income housing
Mechanism: Guarantees (SEDF $50 million)
Focus: Project Bridging Finance via Risk Sharing Guarantees to Banks

3. SINCE 1996 NURCHA HAS SUPPORTED:
>700 PROJECTS
CONTAINING > HOUSES
HOUSES BUILT
FACILITATED FUNDS TO THE VALUE OF R3.2BN

4. IMPORTANT TRANSITIONS
FROM GUARANTEES FOR BANK OVERDRAFTS
TO GUARANTEES FOR MANAGED LOANS
TO CREATING FINANCING STRUCTURES AND MANAGING LOANS OURSELVES

5. BACKGROUND TO AMBITIOUS “BNG” GOALS
1. Minister’s Challenge:
“Grow Your Business”
Construction Finance Institution
“Proposals to HOD MINMEC
Meeting OSI Director and Minister – 10/04
Proposal submitted to Minister – 12/04
Minister and Mr Soros sign MOU – 02/05

6. RENEWED MANDATE & RE-CAPITALISATION
Affirms co-operation between Government and SEDF.
Commits Nurcha to finance houses and R2.4 billion in loans over three years.
400 Complementary projects (infrastructure and community facilities).
Objective to strengthen Nurcha’s capital structure.
SEDF will inject $10 million cash.
If matched by Government over three years.
Complete full agreement in April 2005.
Agreement signed in July 2005

7. ASSUMPTIONS & BUDGET OUTPUTS
OUTPUTS PREMISED ON
1. Increased housing delivery.
2. Developments in credit-linked housing.
3. Increased activity in MIG and Public Works outputs.
4. Acceptance of Nurcha as financier of above.
5. Enhanced funding capacity.

8. NURCHA’S CURRENT AREAS OF FOCUS
Nurcha finances the construction of:
Subsidy (RDP) housing
Credit-linked houses ≤ R
Rental for families ≤ R7 500 per month
Infrastructure and community facilities
NOT FOCUSSED ON HOME LOANS/END USER FINANCE

9. NURCHA’S CLIENTS EMERGING CONTRACTORS ESTABLISHED CONTRACTORS
Borrow without collateral
Through intermediaries
Highly controlled lending
ESTABLISHED CONTRACTORS
Have history and financials
Put up at least 30% funding
Additional security
Moderately controlled lending

10. DELIVERY MECHANISMS
Use of financial intermediaries for emerging and small contractors to assist them “every step of the way”.
Intermediary presence in Limpopo, Free State, Gauteng, KZN, Northwest, northern part of the EC for emerging and small contractors.
Direct lending for established contractors available in all provinces.

11. FINANCING CONSTRUCTION
FINANCIERS
DONORS
CAPITAL MARKETS
DFIS
NURCHA
PACKAGES FINANCES
CHAMPIONS
FINANCIAL REQUIREMENTS
+ RENTAL
CONSTRUCTION:
CREDIT LINKED
SUBSIDY+
+ INFRASTRUCTURE

12. NURCHA ADDRESS 3RD FLOOR ,THE GRACE OFFICES CNR TYRWHITT & BATH AVE
ROSEBANK
2196
JHB
TEL (011)
FAX (011)

13. THANK YOU
SIYABULELA
QUESTIONS AND ISSUES OF CLARITY