presentation to the national council of provinces 12 june 2002
TRANSCRIPT
Presentation to the National Council of Provinces
12 JUNE 2002
Agenda
1. Mandate and Mission
2. NHFC Context (as Gazetted) :• NHFC Primary Responsibilities
3. The External Environment
4. The Housing Finance System - SA
5. The Housing Institutional Environment
6. Strategies and Action Plans
7. Conclusion
Mandate
In partnerships with the broadest range of organisations, to search for new and better ways to mobilise finance for housing, from sources outside the state...
“The corporation’s endeavours should in time ensure that every South African with a regular source of income can gain access to finance for buying or renting or incrementally building or improving his/her own home”
Mission
The NHFC seeks to create housing opportunities for the low and moderate income families by: FundingFunding or UnderwritingUnderwriting the funding of intermediaries and institutions to promote broader access to housing and housing finance FacilitateFacilitate the building of Adequate and Sustainable capacity within the organisations and institutions that it funds PartneringPartnering organisations and institutions to deliver innovative housing finance solution options
NHFC Primary Responsibilities…
Stimulate the Primary and the Secondary
market in the low and moderate income housing
sector: Provide alternative need- based housing finance Provide alternative need- based housing finance
products and financial packages:-products and financial packages:- mortgage and non- mortgage products (loan
discounting and purchasing from lenders, direct
intermediary funding) rental product options (project financing for
rental or rent to buy and installment sale) provide credit to lower income earners building
or developing properties incrementally – PHP,
individual initiatives and through rapid land release
(generally micro-finance)
NHFC Primary Responsibilities…
Undertake the funding as a wholesale
intermediary and act as a fund manager Specialise in identifying, assessing, pricing,
monitoring and managing the risks associated
with the placement of funds Research and Product development
NHFC Primary Responsibilities…
Stimulate the Primary and the Secondary
market in the low and moderate income housing
sector (contd.) : On-going product development Support management capacity of niche lenders Promote and develop partnerships with financial
institutions and other stakeholders to improve
financing capacity to income groups
Overview of the Operating Environment…
External Environment…External Environment… Shrinkage of the housing finance delivery Shrinkage of the housing finance delivery
channels into the NHFC’s target market :channels into the NHFC’s target market : Demise of small banks Saambou, Unifer, FBC, etc.Demise of small banks Saambou, Unifer, FBC, etc.
Market Consolidation – e.g. CashbankMarket Consolidation – e.g. Cashbank
Inadequate capacity of niche lenders to Inadequate capacity of niche lenders to
take-over the increased gap to financetake-over the increased gap to finance
Negative impact of Unemployment and Negative impact of Unemployment and
HIV/AIDSHIV/AIDS
High-risk perceptions of the Low and High-risk perceptions of the Low and
Moderate income financing sector – Cost of Moderate income financing sector – Cost of
funds highfunds high
Overview of the Operating Environment…
External Environment…(contd)External Environment…(contd)Housing Policy – HLMDA, CRA and evolving Housing Policy – HLMDA, CRA and evolving
policy on Social Housingpolicy on Social Housing
Zero Transfer duty on less R 100 000 house Zero Transfer duty on less R 100 000 house
value and value and
Stamp duty abolished for certain mortgage Stamp duty abolished for certain mortgage
transactions between institutionstransactions between institutions
Stability of some of the niche lenders in Stability of some of the niche lenders in
long term funding emerginglong term funding emerging
Alternative tenure options for the end Alternative tenure options for the end
beneficiariesbeneficiaries
The SA Housing Finance System
Capital Markets (Banks,Investors, Life/Pension Funds
REGULATION Parastatals(other DFIs)
Govt
Loan secured by property, lower LTV
ratiosLending
Institutions
LOAN ORIGINATION
LOAN SERVICING
BANKS
Non Mortgage Security
NON-BANKS
NGOs
DepositorsDepositors Borrowers
SubsidyBeneficiaries
The Housing Institutional Environment
Rent
Own
Mobilisation of ConstructionFunding
Stabilising the HousingEnvironment
Servcon
Property in Possession
NURCHA
NHBRC
THUBELISHA
Right sizing
DEVELOPER (Bridging Finance)
RURAL HOUSINGLOAN FUND
End-userGuarantees
Financialintermediary
Capacity Building
Ensure Quality Housing
Funding or Guarantee the Funding
SOCIAL HOUSINIG FOUNDATION
Rural Micro-Finance
Strategies and Action Plans… Prudently, grow the lending business of the Corporation Prudently, grow the lending business of the Corporation
and thus improve on its housing delivery impactand thus improve on its housing delivery impact Increase the number of housing institutions and lenders
across all Provinces
Facilitate the development of capacity of Housing Institutions, Primary and Niche Lenders (Standards and Guidelines)
Continuously enhance the Risk Management capacity and Continuously enhance the Risk Management capacity and
competency of both the NHFC anud or clients’competency of both the NHFC anud or clients’
Accelerate the Accelerate the medium densitymedium density housing development – housing development –
thru the Job Summit Social Rental Housing Projectthru the Job Summit Social Rental Housing Project
Continue to pilot pragmatic PPP models that will deliver :Continue to pilot pragmatic PPP models that will deliver : Affordability
Value for Money, and
Risk Sharing
Proactively undertake Housing Finance Research and Proactively undertake Housing Finance Research and
Product DevelopmentProduct Development
THANK YOU
QUESTIONS…
Indicator Now Target 2002/3
Cum. Approvals R 1.5bn R 1.9bn
Cum. disbursement R 1bn R 1.5bn
No of houses delivered
80 397 90 500
No of loans granted 195 043 205 000
No of new Intermediaires
25 28
Undertaking Wholesale Funding…
NHFC’s Performance…
NHFC Housing Impact – TO-DATE
HOUSING IMPACTHOUSING IMPACT TOTAL TO DATETOTAL TO DATE
Complete housing units financedComplete housing units financed 80, 39780, 397
Incremental housing loans Incremental housing loans grantedgranted
489 480
Number of people benefitedNumber of people benefited 2,47 million2,47 million
NHFC’s Performance…
Budget Highlights…
Priorities of the Corporation…
Prudently, grow the lending business of the Corporation and thus improve on its housing delivery impact
Continuously enhance the Corporation’s Risk Management capacity and competency
Attain accelerated delivery on the Job Summit Pilot Project
Effectively implement the Corporations processes and systems – Drive Speed, Flexibility and Impact
Focus on the need to challenge, develop and retain the best people in the Corporation
Improve the Corporations Marketing and Communication with all its Stakeholders
Budget Overview 2002/5
• Deliver housing finance to a cumulative total of 334,000 households (of which 30,500 new and 7,500 existing houses) in most provinces;
• Facilitate the building of capacity in the housing and housing finance sector by supporting 11 new and emerging housing finance intermediaries and housing institutions;
• Change the housing finance environment through promoting new loan products, relevant delivery channels, supporting appropriate regulatory & policy frameworks and new housing options.