This report summarises findings of a market research study to identify and estimate the size of the housing microfinance (HMF) market prepared for the Rural Housing Loan Fund (RHLF). In addition to exploring RHLF’s historic market of households in rural areas earning less than R15,000 per month, the research aimed to identify and size opportunities across South Africa in both urban and rural settings in segments of the market that are unlikely to be able to access secured forms of housing finance. The need to expand the research focus beyond RHLF’s core market was given further impetus by RHLF’s restructuring and its incorporation into the planned new Human Settlements Development Bank (HSDB), which will be established by consolidating the three Development Finance Institutions under the Department of Human Settlements.
The focus of the research was on the demand side, placing the current housing situation, capacities and preferences of households who comprise various market segments at the heart of the analysis. With this “customer-at-the-centre” approach, the analysis hopes to provide a sound basis for further deliberations on the positioning and specific role of a restructured fund or facility that supports incremental housing processes within the new Human Settlements Development Bank with a special focus on those unable to access mortgage finance. Ideally this fund should ‘crowd in’ the investment capacity of both households and the private sector, enable households to build wealth and manage risks, and deliver on a vision to create durable, leverage-able housing assets through an optimised incremental housing process.