The R1bn guarantee fund for affordable homes which was announced by President Jacob Zuma in his State of the Nation address earlier this year, “only exists in theory”.
This despite the growing shortage of affordable homes as municipalities struggle to meet demand.
So says Cas Coovadia, CE of the Banking Association of South Africa (Basa).
He yesterday told MP’s of the Standing Committee on Finances that meetings have not been held with Human Settlements Minister Tokyo Sexwale about the fund.
SA has an affordable housing shortage of about 600,000 for households earning between R3,500 and R15k.
This fund is aimed at helping prospective homebuyers who are too wealthy to receive a subsidy house from the state and too poor for a home loan from the bank.
Coovadia railed against municipalities for not building more affordable houses.
“The banking sector is being criticised for not giving enough financing for housing, but even if the government gives a 100% guarantee it is to no avail if the houses aren’t being built in the first place.”
He said about 120,000 affordable homes have to be built each year, but only 80,000 have been annually built over the last three years. “The inability of municipalities is the problem.”
The finalisation of municipal regulations for the building of houses, such as the issuance of an approval certificate for development, took 30 months five years ago. This is 48 months at the moment.
“Developers of affordable homes are simply withdrawing from these projects.”
He rejected criticisms from committee members that banks are not lending enough to small and mid-sized enterprises. He criticised development financers such as Khula that want to compete directly with commercial banks with its Khula Direct model – rather than making a plan to provide security for those without collateral, but with a sound business plan. – Jean-Marie de Waal, Sake24
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