Human Settlements Development Bank close to being finalised

Deputy minister of human settlements, water and sanitation Pam Tshwete on Thursday told parliament that the establishment of the Human Settlements Development Bank (HSDB) was at an advanced stage.

“The bill for the bank has been drafted. It has been sent to the state law advisers for scrutiny and it will be presented to the cabinet in May. It will then go for public comments, which is important, it cannot be finalised without going for public comment,” said Tshwete.

The deputy minister, together with National Housing Finance Corporation (NHFC) and Social Housing Regulatory Authority entities, appeared before parliament’s portfolio committee on human settlements, water and sanitation to discuss the department’s finances.

In his 2019 state of the nation address, President Cyril Ramaphosa announced that the government was going to establish the Human Settlements Development Bank, which aims to expedite the delivery of houses in the country.

The state set a target of building 500,000 houses by 2024.

Human settlements minister Lindiwe Sisulu on Sunday said in a statement the NHFC is in the process of signing a number of service-level agreements with banking institutions, as well as signing a memorandum of understanding with the Banking Association SA (Basa), to prepare for when “policy is approved”.

On the preparatory work to become a bank, acting CEO at the NHFC Sizwe Tati said on Thursday he hopes that the government will pass the bill later this year.

“We are in conversation and the department keeps us informed of where they are in preparing the bill. The bill needs to be presented to the minister [Sisulu] so that she can take it to cabinet. My understanding is that it is at an advanced stage.

“The comments from the state law advisers were received and all of the recommended changes are being incorporated. So there are a few issues to be finalised here and there.”

Speculating, Tati said the bill might land on Sisulu’s desk around July or August.

“There are steps that we have taken as an institution and we are not waiting for the promulgation of the bank in order to be in a state of readiness. We are looking at specialist skills that will be recovered to deliver in the new bank.”

Answering a question on how the commercial banks responded to the establishment of the HSDB, Tati said: “Before we revive the mortgage revolt insurance, we have to do a market test because the last time we designed that business case was more than 10 years ago. The market shifted and at the time we were designing it, the likes of Capitec were not in existence.”

He explained that it was not so much that the banks are refusing. “We need to retest their levels of appetite to serve this market segment — in relation to the other new players that have come in, whether this product will make sense or not, so that we can design a product that is appropriate for the banking sector.”

ANC MP Nancy Sihlwayi said the establishment of the bank proved that “the poor are bankable” despite their financial challenges.

Sisulu also said on Sunday her department was encouraging applications for a finance-linked individual subsidy programme (Flisp) provided by the government for those who earn between R3,501 to R22,000 a month. This subsidy, which can be used as a deposit or reduce the bond balance, is to encourage home ownership among teachers, factory workers, receptionists, nurses and police, among others.

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