RURAL HOUSING LOAN FUND

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RURAL HOUSING LOAN FUND

• Portfolio Committee on Housing
• Presentation 10 May 2006

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Above is the home of the Nyalunga family in
Lydenburg Extension 6. Towards the back is an
original RDP house that the family received in
1996 and that has been extended one room at a
time. The Nyalungas started by stockpiling
building material and built the foundation
themselves. They took four successive loans
amounting to R22, 000 from RHLF retail partner
Indlu to buy bricks, tiles, door and window
frames and to pay for labour.
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RHLFs Vision Statement

• RHLF is a world class rural social venture
  capital fund that creates new financial
  arrangements and opportunities for rural families
  to improve their housing, economic and living
  environments.

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RHLF implementation strategy

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Presentation at Finmark Trust Forum 28 March
2006 Illana Melzer
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RHLFs contribution to Peoples Contract to
Create Work and Fight Poverty

• Establish credit histories repeated access to
  credit
• PPP with intermediaries creating jobs within
  housing finance value chain
• Stimulate local economic development using local
  builders in construction
• Enable access to public utilities
• Supporting the BMS industry create jobs in the
  industry and related industries
• Linking second economy to first economy

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More Housing, more impact at lower cost of credit

• Strategic Directions
• Back to the housing basics (more impact, better
  payment behavior)
• Efficient delivery scale, back-office
  concentration, smart use of technology
• Expand into the gap market larger non-mortgage
  housing loans (R10 -30k), longer tenors ( 36
  months)

Lower TCOC
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More Housing, more impact at lower cost of credit

• Selected Strategic Initiatives
• Savings Linked Housing Credit
• Stokvels, Village Bank, Blue Dot Rural
  Housing/Wizzit Cell phone banking
• Community-Based Loan Origination
• Emerging farmers and farmworkers
• Alternative Building Technologies
• Possible changes in Rural Subsidy, alternative
  building technology supports environmentally
  friendly housing
• Rural Worker Housing
• Cooperate with employers on agri-village
  development
• Link with Building Material Manufacturers
• Link second economy to first economy
• Leveraging Housing Subsidies with RHLF top-up
  credit
• New Conventional Wholesale Clients
• Alternative distribution channels, incremental
  housing.

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Commitment to BEE

• Four distinct strategic thrusts
• Demand driven developmental needs of end-users
• Funding black owned and managed companies
• Warehouse RHLF shares for future acquisition
• Employment equity

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RHLF development impact in ISRDS April 2005 to
March 2006 (Annualised) Loans in 17 Rural
Nodes Number of loans 2 881 Value of loans
disbursed R 7.9 m
Northern Free State DC
Kgalagadi
DPLG listed Rural Nodes
Sisonke DC
Other Rural District Councils
Sisonke DC
Francis Baard DC
West Coast DC
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Employment Equity
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RHLFs response to Key Environmental factors

• Financial Sector Charter Constructive
  engagement with banks, funding of clients
  reaching RHLFs maximum exposure limits
• Land and Agricultural Policy Share experiences
  in micro-finance for housing with Mafisa
• National Payment System and Competition in
  Banking Sector RHLF made representations to
  SARB and PASA
• New National Credit Bill bigger loans and
  longer terms at lower cost to borrower

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Board of Directors
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• Thank You