RURAL HOUSING RURAL HOUSING LOAN FUNDLOAN FUND

Sustainable ShelterSustainable Shelter

RHLF set-upRHLF set-up

• Incepted in September 1996 as a Section 21 company

• Help address the housing needs of rural poor > 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 RHLF’s ability to raise

additional funding

Core PrinciplesCore 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?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 RHLF implementation strategystrategy

R 3500

R 2500

R 1500

R 600

R H LF Strategy

M arket served by establishedreta ilers.

SEGMENT 1: R egular Incom e - Form ally Em ployed - earn ingabove R 3500 per m onth.

SEGMENT 2: R egular Incom e - Form ally Em ployed.

SEGMENT 3: R egularIncom e Inform ally/ SelfEm ployed.

SEGMENT 4: Irregular Incom e/ U nem ployed

20002%

20%34%

44%

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 constraintsDemand 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 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