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SAVINGS SCHEMES
During 2000 to 2003, NURCHA intro-
duced innovative products including
Savings Schemes with community
associations. This programme en-
couraged housing beneficiaries to
save R600 each in community saving
schemes in order to leverage state
subsidies for end-user housing and
it received support from the National
Department of Human Settlements
(known then as the National Depart-
ment of Housing).
The programme allowed benefi-
ciaries to jump the housing queue if
the beneficiary was prepared to save
R600. Gqwetha says that NURCHA
drove the process and the savings
schemes proved successful. It showed
a willingness by communities and
housing beneficiaries to pay for ac-
commodation and also to resolve
their own problems. A significant
number of houses were built during
this period and NURCHA truly ful-
filled its mandate. Government had
a change of policy, which required
beneficiaries to save R2 479. This
was beyond what most people could
afford. It became increasingly diffi-
cult to recruit communities into the
programme and encourage them to
save for their own homes. It was the
demise of the savings schemes.
At provincial level housing of-
ficials ignored the savings element
and simply allocated housing to
beneficiaries. NURCHA received the
signal that the savings schemes were
not producing the housing volumes
that government wanted to achieve.
Instead of being encouraged to save
and solve their own housing prob-
lems, beneficiaries just wanted to get
in the queue for government housing.
AFRICAN BANK
Another key catalyst during this
period of NURCHA’s history was the
partnership with the African Bank.
The bank took the risk of lending
to contractors while NURCHA pro-
vided guarantees in the event that
a contractor defaulted. Gqwetha
says that African Bank became a sig-
nificant player in the sector andmade
huge strides in financing delivery of
22 000 houses. Then disaster struck:
interest rate hikes, quality issues
with housing, the administrative is-
sues of Housing Board. The result of
these combined challenges was that
contractors defaulted on payments
to the African Bank. It was a disaster
as NURCHA experienced one of its
biggest losses when it had to honour
guarantees. African Bank also took
massive losses, causing it towithdraw
from the sector.
GUARANTEES
The African Bank saga was a sig-
nificant learning curve as NURCHA no
Deals