Housing in Southern Africa July 2015

NURCHA’s Ideals and

It’s all about ideals…government’s development finance institution, the National Urban Reconstruction and Housing Agency (NURCHA), celebrates its 20 year milestone as the leading Construction Finance and Programme Management institution in South Africa. Since 1995, NURCHA has provided R3,8 billion developer funding to roll out 392 145 housing opportunities across the sector with project values of more than R20 billion.

NURCHA Managing Director, Viwe Gqwetha, shares some of the sig- nificant milestones in their rainbow history - the African Bank defaults; the Savings Schemes for communi- ties and associations; Presidential projects; newways to operate; a new breed of funding partners; and the RDP/BNG fully subsidised housing policy.

NURCHA from the start. Viwe explains: “At that time in our history there were structures such as Housing Forums, policy institutions including the Urban Foundation, and Independent Development Trust, who were involved in funding housing solutions etc. NURCHA was meant to have a five-year lifespan to bankroll contractors to provide housing for the poor, as well as fund micro lenders in a bid to upgrade low-income housing and provide infrastructure and services such as schools and clinics.” A NEW STRUCTURE From 1995 to 1999, NURCHA offered commercial banks guarantees that if a contractor defaulted on a bank loan it would pick up the tab. But, accord- ing to Viwe, offering these guarantees to encourage the commercial bank- ing fraternity to come on board with development finance failed. NURCHA provided guarantees to micro funders, including Ithala Bank, to fund small loans to householders for upgrades, water tanks and so on. On the supply side, NURCHA financed contractors and 16 000 houses were delivered by 1999 and grew to 88 000 in 2003. NURCHA continued to pro- vide innovative products but some risks emerged at this early stage. Contractors experienced payment delays; some of the former Housing Boards had administrative problems and, also interest rates spiked to 25%, borrowers felt the pinch.

DEMOCRACY & HOUSING

Viwe Gqwetha

Established at the start of South Afri- ca’s newdemocracy, NURCHAwas set up by the country’s iconic statesman, President Nelson Mandela and other notable leaders such as Frederik Van Zyl Slabbert, international philan- thropist billionaire George Soros and the South African government. With the backing of the President and Jay Naidoo, the Reconstruction and De- velopment Programme (RDP) office and stakeholders, NURCHAwas given the task to normalise the market and provide finance to contractors to de- liver housing for the poor. According to Gqwetha, Van Zyl Slabbert should be credited for bringing Soros on board to part- ner with NURCHA and the South African government to fund the development programme. Other notable stakeholders and support- ers include NURCHA board member Khehla Shubane, who with Cedric de Beer, Jill Strelitz and Nhlanhla Mjoli has guided, shaped and supported

I n boxing terms NURCHA is en- dowed with courage and an at- titude that is willing to take on all comers as it punches above its weight considering its small balance sheet and marginal income. NURCHA has successfully cornered almost 10% of the Affordable Hous- ing market, making it a tour de force in housing delivery. After market lulls of previous years and a new forward-thinking strategy, govern- ment’s funding arm for developers and emerging contractors has led the institution on an exceptional growth path. As the housing market recovers from the global crisis, it is time to reflect on what NURCHA has achieved and to recognise what it brings to the human settlements sector through all of its programmes and new product offerings.

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