Mail & Guardian Reporter
Banks and other financial institutions have no excuse to refuse loans to people in the low-income category, if survey results released by the National Housing Finance Corporation (NHFC) are anything to go by.
The survey, conducted in five provinces, targeted people in the R1 000 to R6 000 monthly income group.
It indicates that a fifth of low-income earners interviewed could not purchase a house, in spite of demonstrating an ability to afford a formal dwelling. Yet about two-thirds of the people surveyed are saving about 10% of their income monthly towards housing. On average, such savings over a two-year period yield a total amount of R8 700 a substantial amount to make a deposit on a house in the R45 000 to R50 000 range.
A statement released by the NHFC says affordability is not a problem for the majority of low- and moderate-income families. The statement identifies the lack of suitable housing and access to finance from banks as the two obstacles to the purchase of property.
NHFC CEO Samson Moraba says the corporation commissioned the survey with the purpose of identifying bottlenecks in the granting of mortgage bonds to low-income earners. “Many financial institutions often cited the lack of data or [market] profile about low-income earners as the main reason for excluding many of the people in the lower end of the market,” Moraba says.
Moraba added that the NHFC’s mission the creation of housing opportunities for the poor also includes assisting people who are making a living in the informal business sector, who by nature of their circumstances are not in a position to open bank accounts and are thus unable to access housing finance.