housing - National Housing Finance Corporation

Mr S S Moraba Chief Executive Officer
housing as one of its priorities. In fact, within six months
of taking office, Joe Slovo, the first post-apartheid
Housing Minister, had signed a Memorandum of
Understanding with the Association of Mortgage Lenders
(precursor to the Banking Association of South Africa).
During October 1994 the Botshabelo Accord was signed
and by December of that year, the White Paper on
Housing had been finalised and the Masakhane
Campaign launched.
It was in this milieu of intense focus on the need to
remedy shortcomings in the housing finance system
that the National Housing Finance Corporation (NHFC)
was born. NHFC was registered as a public company
in terms of the Companies Act, 1973, on 10 May 1996
(as an outcome of the Botshabelo Accord and White
Paper on Housing) exactly two years to the day that
Nelson Mandela was inaugurated.
The Government Gazette at the time noted that NHFC
was required to ‘specialise in identifying, assessing,
pricing, monitoring and managing the risks associated
with the placement of wholesale funds with retail
intermediaries active in the target market’. It also stated
that NHFC would be exempted from the requirements
of the Banks Act so long as it took risks for which
other financiers did not have the appetite and that it
therefore developed policies and processes to manage
such risks.
To give effect to this vision, the Corporation formed the
following subsidiaries:
u Niche Market Lenders (NML) to provide large-scale,
on-balance-sheet debt funding to intermediaries
such as mutual banks, development corporations,
NGOs and microlenders;
u Housing Equity Fund (HEF) to provide technical
assistance and start-up capital to new and pilot
ventures in the home lending sector;
u Housing Institutions Development Fund (HIDF) to
provide development capital at below market rates to
viable, start-up social housing institutions; and
u Rural Housing Loan Fund (RHLF) to enable low- and
moderate-income households in rural areas to
maximise their housing choices and improve their
living conditions by accessing small building and
renovation loans from intermediaries.
Social Housing Foundation (SHF) (in 1997) and Gateway
Home Loans (Proprietary) Limited (in 1998) were added
to the NHFC stable. SHF was set up to support the
establishment of a viable social housing sector and
provide for its future expansion. Gateway was
established to ensure the delivery of housing finance at
scale to the so-called ‘gap market’ whereby standardised
home loans were bought and funded through a
securitisation process.
In October 1998, NEDLAC adopted the Presidential Job
Summit Housing Pilot Project, and in 2002, the NHFC
was appointed to manage the programme and to
become the implementation agent.
The microfinance sector underwent significant
developments in 1999:
u The Micro Finance Regulatory Council (MFRC) was
established, with the assistance of the NHFC, to
promote sustainable growth of the microlending
industry in servicing unserved credit needs, while
ensuring that consumer rights were protected; and
u The exemption ceiling under the Usury Act was
increased from R6 000 to R10 000.
NHFC ANNUAL REPORT 2006 9