The Consolidation of the Human Settlements Development Finance Institutions (DFIs) to form the Human Settlements Development Bank

The Ministry of Human Settlements has committed itself to the establishment of a “Housing Development Bank” in support of the entire human settlements delivery value-chain.

There are currently three Development Finance Institutions (DFIs) – the National Housing Finance Corporation (NHFC); the National Urban Reconstruction and Housing Agency (NURCHA); and the Rural Housing Loan Fund (RHLF) – that report to the Minister of Human Settlements.

In 2007/08 National Treasury at the request of Cabinet undertook a review of the mandates of South Africa’s Development Finance Institutions (DFIs).The review was conducted in consultation with the National Department of Human Settlements.

The DFI Review recommended that the three housing DFIs be amalgamated into a single institution in order to better and more efficiently serve the human settlements sector with increased sale and greater impact.

Following the Treasury Review, the National Department of Human Settlements undertook an investigation into finance delivery mechanisms for the Human Settlements Sector. This review found that the existing expertise and capacity in the three DFIs is an important resource for the sector and needs to be preserved. The DFIs, however, operate at too small a scale to impact significantly on the need in the sector. This review also proposed that a consolidated Human Settlements Development Finance Institution (HSDFI) be established comprising a consolidation of the three existing DFIs.

In 2014, the Minister of Human Settlements committed herself to the establishment of a “Housing Bank” in support of the entire human settlements delivery value-chain. The proposed Human Settlements Development Bank (HSDB) aims to address:

  • End-user finance for a range of housing circumstances
  • Bridging and developer finance
  • Mobilising private sector partnerships
  • Enhancing the leverage of human settlement grants
  • Supporting transformation in the human settlements sector