- SA Home Loans to extend credit to qualifying government staff
- Government’s pension fund has 1.2 million active members
South Africa’s Government Employees Pension Fund, the continent’s largest, invested 10.5 billion rand ($730 million) in mortgage provider SA Home Loans Ltd. to boost government workers’ access to housing.
The investment will be done by the Public Investment Corp. on behalf of the GEPF, according to a statement distributed in Johannesburg on Wednesday. Of the funds, 5 billion rand is earmarked for civil servants, 2 billion rand will be allocated to affordable housing for low-income earners, 2 billion rand to help SA Home Loans extend mortgages to other qualifying applicants, and 1.5 billion rand for affordable housing developers.
“We can make good financial returns,” Dries de Wit, vice chairman of the GEPF, said at a presentation in Johannesburg. Housing is key to economic development, stimulates the demand for goods and services, and will help grow the economy, he said.
In South Africa, with unemployment at 27 percent, there have been increased protests over a lack of decent housing, access to finance and the slow pace of land reform since the end of apartheid in 1994. The GEPF’s initiative will be available to its 1.2 million active members who qualify for credit and will also yield social returns with loans extended at competitive rates, the pension fund said.
SA Home Loans, the country’s fifth-largest mortgage provider, has built a website that will poll government employees to gauge their housing needs and aspirations, said Guy Saville, a director of the company. If this pilot project works, the housing finance model could be extended to other South Africans with more lenders becoming involved, he said.