Affordable housing finance for the unbanked

Affordable housing finance for the unbanked
Photo by Shutterstock
Affordable housing finance for the unbanked
SectorMost major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Infrastructure
Real Estate
Business Model Description

Provide affordable housing finance to households outside the formal banking system and with limited credit history, at conditional repayment rates, using algorithmic assessments of social and non-banking financial transactions to determine a risk profile.

Expected Impact

Enable a path to affordable house ownership, which provides for a safe living environment and reduced inequalities.

Indicative ReturnDescribes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
5% - 10% (in ROI)
Investment TimeframeDescribes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Long Term (10+ years)
Market SizeDescribes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
1.5 million households living in informal settlements across South Africa
Average Ticket Size (USD)Describes the USD amount for a typical investment required in the IOA.
< USD 500,000
Direct ImpactDescribes the primary SDG(s) the IOA addresses.
No Poverty (SDG 1) Sustainable Cities and Communities (SDG 11)
Indirect ImpactDescribes the secondary SDG(s) the IOA addresses.
Quality Education (SDG 4) Decent Work and Economic Growth (SDG 8) Reduced Inequalities (SDG 10)
Sector Sources
  • 1) Sachs, J., Schmidt-Traub, G., Kroll, C., Lafortune, G., Fuller, G., Woelm, F. (2020). The Sustainable Development Goals and COVID-19. Sustainable Development Report 2020. Cambridge: Cambridge University Press. https://dashboards.sdgindex.org/#/ZAF 2) National Science and Technology Forum (2019). The National Development Plan. http://www.nstf.org.za/wp-content/uploads/2019/04/All-The-NDP-1.pdf 3) Le Roux, A., Arnold, K., Makhanya, S. and Mans, G. (2019). South Africa’s urban future: Growth projections for 2050. Green Book. https://pta-gis-2-web1.csir.co.za/portal2/apps/GBCascade/index.html?appid=3c4901e8681244d1a7989e8ed2ace1f9 4) Industrial Development Corporation (2019). The Case For Investing in South Africa. https://sainvestmentconference.co.za/wp-content/uploads/2019/11/The-case-for-investing-in-South-Africa-2019-Executive-summary-31-October-2019.pdf 5) Sustainable Infrastructure Development Symposium (2020). Sustainable Infrastructure Development Symposium South Africa. https://sidssa.org.za/
  • 6) Deloitte (2020). The Impact of COVID-19 on infrastructure projects and assets. https://www2.deloitte.com/content/dam/Deloitte/ng/Documents/finance/ng-the-Impact-of-COVID-19-on-Infrastructure-project-and-assets_27052020.pdf 7) Arndt, C., Davies, R., Gabriel, S., Harris, L., Makrelov, K., Modise, B., Robinson, S., Simbanegavi, W., van Seventer, D. and Anderson, L. (2020). Impact of Covid-19 on the South African economy. https://sa-tied.wider.unu.edu/sites/default/files/pdf/SA-TIED-WP-111.pdf 8) Organization for Economic Cooperation and Development (2019). Gender Equality and Sustainable Infrastructure. http://www.oecd.org/governance/gender-equality-and-sustainable-infrastructure-paris-march-2019.htm 9) Organization for Economic Cooperation and Development (2019). Social Institutions and Gender Index 2019. https://www.genderindex.org
IOA Sources
  • 10) Rural Housing Loan Fund. Understanding Demand for Housing Microfinance in South Africa http://housingfinanceafrica.org/app/uploads/RHLF-HMF-report_FINAL.pdf 11) Centre for Affordable Housing Finance (2019). Yearbook - South Africa 2019. http://housingfinanceafrica.org/app/uploads/V21-SOUTH-AFRICA.pdf 12) Interview with Monique Mathys from IMP on 15/04/2020. 13) Centre for Affordable Housing Finance (2019). Housing Finance in South Africa. http://housingfinanceafrica.org/countries/south-africa/ 14) Email correspondence with Katherine Cox from TUHF on 24/7/2020.
  • 15) Email correspondence with Katherine Cox from TUHF on 24/7/2020. 16) South African Government (2019). South Africa Voluntary National Review: Empowering people and ensuring inclusiveness and equality. https://sustainabledevelopment.un.org/content/documents/23402RSA_Voluntary_National_Review_Report___The_Final_24_July_2019.pdf 17) Statistics South Africa (2017). Sustainable Development Goals: Baseline Report 2017. Available at: www.statssa.gov.za 18) Statistics South Africa (2019). Sustainable Development Goals: Country Report 2019 - South Africa. http://www.statssa.gov.za/MDG/SDGs_Country_Report_2019_South_Africa.pdf 19) McGaffin, R., Spiropoulous, J. and Boyle, L. (2018). 'Micro-developers in South Africa: a Case Study of Micro-property Developers in Delft South and Ilitha Park, Cape Town', Urban Forum, 30, 153-169. https://link.springer.com/article/10.1007%2Fs12132-018-9347-2
  • 20) Baer, T., Goland, T. and Schiff, R. (2013). New credit-risk models for the unbanked. https://www.mckinsey.com/business-functions/risk/our-insights/new-credit-risk-models-for-the-unbanked# 21) Better Living Challenge (2020). Report on developing innovative financing models for gap housing. https://betterlivingchallenge.co.za/ 22) South African Human Rights Commission (2020). The Right to Adequate Housing Factsheet. https://www.sahrc.org.za/home/21/files/Fact%20Sheet%20on%20the%20right%20to%20adequate%20housing.pdf 23) National Treasury Republic of South Africa (2019). Budget Review. http://www.treasury.gov.za/documents/national%20budget/2019/review/FullBR.pdf 24) Organization for Economic Cooperation and Development (2019). Social Institutions and Gender Index 2019. https://www.genderindex.org