Mail & Guardian Reporter
The critical shortage of housing, and funding problems experienced by South Africans earning less than R3500 a month, will be high on the agenda at the Institute for Housing of South Africa (IHSA) conference in Pietersburg at the weekend.
Themba Mthethwa, president of the IHSA, says banks have been badly burned when trying to service this sector in the past.
“However, we would like to put this behind us and ask banks to help. We are pleading with financial institutions to work with us constructively to find alternatives. We hope this conference will, at last, bring all parties together to discuss some important issues.
“We intend allowing [the] government, the financial services sector and even the alternative financing organisations to state their cases.”
With a theme of “creating sustainable communities”, the Standard Bank-sponsored conference will cover a wide range of financing issues surrounding community, business and even donor participation in the implementation of South Africa’s national housing policy.
Other innovative papers will look at the possibility of “creating economically viable eco-villages and sustainable rural towns”. Another issue up for discussion will be the implementation of the National Savings Scheme.
According to Mthethwa, crucial findings of the housing finance research programme will be released at the conference, indicating that very few subsidies that had been granted in terms of the government’s national housing subsidy scheme had been linked to private sector bank credit.
“Of a grand total of 1,35-million subsidies, delivered by the end of April 2001, less than 1% were linked to credit,” he pointed out.
Mthethwa is hopeful that deliberations over the weekend would pave the way for local banks to follow in the footsteps of their international counterparts and benefit from servicing the lower end of the market. In addition, consumers had to be educated to play their part.
Clive Tasker, director of Standard Bank home loans said: “It is a tough and sometimes frustrating road but it is important that banks, in partnership with other stakeholders, continue working on finding appropriate finance solutions.”
Tasker says Standard Bank is working on a number of commercially viable and appropriate initiatives. One initiative involves encouraging clients to save for houses.
By using a banking account for this purpose, Tasker says, low-income earners will gain access to and become familiar with banking in general, as well as specific financial products.
Between October and November, Standard Bank will launch its participation in the National Savings Scheme in the Eastern Cape in collaboration with the National Urban Reconstruction and Housing Agency, one of the agencies created to deal with housing finance stumbling blocks.
“Once we have evaluated the success of the Eastern Cape initiative, we will begin the national roll-out of the scheme,” Tasker says.
Mthethwa says it is time to constructively unlock finance from banks and encouraged other financial institutions to follow suit.
He suggests that communities consider starting savings clubs similar to stokvels as a precursor to entering the formal banking sector.
ENDS