New bank to help those in housing gap market

PUBLIC servants who are in the gap market are expected to start streaming through the doors of the new Human Settlements Development Bank to seek mortgages in October.

The bank’s chief executive, Samson Moraba, said the bank is setting up processes and mechanisms to get it up and running by the set date. He said that up to now many people, including three million people in the public sector, could not get help from commercial banks because they were averse to risk. But the Human Settlements Development Bank will be able to assist this share of the market and provide the necessary home finance.

Moraba said the government employee scheme has 1.2 million people. “If you include the rural market, because there are teachers and nurses in rural areas, it is between 2 million and 3 million.” Branches will be opened in all provinces, he said. Moraba said they were also working with the traditional commercial banks.

But their mandate was very clear that they need to get people who are in the gap market. He said the new bank would take the form of a development finance institution in the mould of the Development Bank of Southern Africa. The bank would provide financial assistance to the whole value chain. The new bank was formally launched in Cape Town on Friday.

Human Settlements Minister Lindiwe Sisulu said this was a breakthrough for many people in the gap market. She said it had taken them a long time to get to the point of the launch of the bank.

They would ensure they get to the position where the millions of public servants would be able to get the help they wanted.

The gap market comprises people who earn to much to get RDP houses and too little to qualify for mortgages at the banks.