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for that product.” He added, “The
Mortgage Default Indemnity Scheme,
a guarantee scheme to cover banks
from defaults in the housing sector
stopped short partially due to the
initial capitalisation that was not
forthcoming from Treasury. Once
again the product was ahead of its
time and Treasury had other pri-
orities. My personal belief is that the
programme would have taken off if
all the parties were involved. This
requires capitalising it properly, going
back to Treasury to ensure that it is
adequately funded andwe could then
achieve four times the impact, than
going it alone as NHFC. The banks
would have then extended funds to
more people, when banks retreat this
is the first market that is affected. The
Mortgage Default Indemnity Scheme
does deserve another chance.”
The NHFC’s deal with mining gi-
ant Implats to provide home loans
to mining employees was one of the
highlights. “The 2 000 housing pilot
project with the mining house was
an overwhelming success. The global
financial market subsequently went
through a meltdown and employers
faced financial challenges.”
The Finance Linked Individual Sub-
sidy Programme is another product
that had the potential to really make
an impact and deliver housing in the
Gap market. This is householders
earning too much for fully subsidised
housing and not enough to qualify
for entry level housing. “A key factor
was the decision to allocate FLISP
funds to the provinces, and it was a
long and arduous process before the
“
When the National Housing
FinanceCorporationwas formed
five years ago, born out of the
dire need to address the critical short-
age of housing in South Africa, our
mission was clear – to create housing
opportunities for low and moderate
income families. The demand for
housing in South Africa was, and
remains, enormous particularly in
the low and moderate income com-
munities.
The mainstream financial insti-
tutions either lacked the capacity
to address these demands or were
unwilling to do so because of the per-
ceived high-risk nature of thismarket.
The challenge to the NHFC was thus
to find innovative ways of addressing
the needs of the market. In our first
five years of operations NHFC has
risen admirably to this challenge,
albeit not without some setbacks.
The NHFC set about nurturing a client
base that would have the capacity
Eric Molobi, NHFC’s first
cha i rperson and i coni c
b u s i n e s s ma n , i n t h e
Chairman’s Report in 2001,
stated
ERIC MOLOBI
to begin to make a dent in the enor-
mous and innovative mechanisms
to ensure sustainable delivery and
a ‘win-win’ situation for our client,
ourselves and, of course, themillions
of South African families previously
denied access to housing finance.”
Eric Molobi, NHFC Chairman’s
Report, in 2001.
He served as Chair-
man from 1996-2006. The NHFC
Annual Report in 2006, in memory of
the late Chairman stated: ‘His love for
the people and the desire to improve
their well-being led him to contribute
tirelessly, in spite of his numerous
NHFC received these funds. Govern-
ment does not have to create new
money, it simply needs a new piece
of legislation to channel FLISP funds
directly to the NHFC. It requires a
streamlined approach. Banks are effi-
cient institutions and FLISP subsidies
would increase the number of hous-
ing opportunities in the low income
market.” The state-owned entity has
weatheredmany storms, scaleddown
and retained key staff members and
has a strong balance sheet.
“The NHFC is on the brink of being
conferred with much greater respon-
sibility to incubate other previously
funded DFIs of Human Settlements.
We are comforted that the Minister is
now impatient to make this happen
and quicken the pace of delivery,”
concludes Tati.
commitments, to the causeof housing
and the corporation.’
Established in 1996, the NHFC
report in 2001 showed that there had
been consistent growth at the state-
owned entity from the outset. Grow-
ing its advances towell over R1 billion,
which in itself is highly commend-
able, loans approvals rose to almost
R115 million in 1997 to R1,36 billion
in 2001. Over the first five years, loans
worth R1,3 billion were advanced to
53 clients, to provide 486 980 end
user loans and create 67 451 housing
opportunities.
The Eric Molobi in
novation Hub