Since 2000, the Kuyasa Fund has provided housing micro finance services to active savers who have qualified for a national housing subsidy and are engaged in the People’s Housing Process (PHP). In 2005, when this report was written, the Kuyasa Fund’s current client base comprised households earning less than R3 500 per month in the Western Cape.
Kuyasa’s desire to expand its services and examine its own loan product, and the fact that housing micro finance is under-researched in South Africa, has encouraged the Fund to undertake a research project in Delft to examine the housing micro finance possibilities in this area.
Delft, which lies east of Cape Town, is home to a combination of African and coloured communities. The formal houses in Delft were built by the Integrated Service Land Project (ISLP) during the 1990s. The process involved Delft residents receiving their housing subsidies in the form of a house, not in cash; in other words they were not involved in the housing construction process. This lack of choice has made the housing situation in Delft vastly different from the situations in other Cape Flats areas, as well as from the Peoples’ Housing Process delivery method with which the Kuyasa Fund is familiar. In Delft, there was little choice and subsidy beneficiaries moved into finished products – which led to considerable dissatisfaction among Delft residents. In the PHP process, households participate in the delivery process and determine the housing product. Generally, this approach leads to greater buy-in and satisfaction with the end product.
Due to the different cultural and linguistic realities in Delft, as well as the specific housing context that exists as a result of the housing subsidy policies that guided the ISLP, Delft represents a different type of community to those with which Kuyasa typically engages. The Fund realizes that successful projects in Delft will require a greater understanding of the existing socio-economic conditions of the area.
Consequently, the Kuyasa Fund embarked on an intensive research study in Delft to assess the housing needs and aspirations of the community. The main objectives of this research were to:
• examine perceived housing needs and aspirations
• interpret the construction and housing-related skills present
• determine the demand for Kuyasa-type services in the area
• recommend a new loan product, if what Kuyasa currently offers is not appropriate for this community
The project set out to determine the best way to provide housing loan finance to people in a post-subsidy context where clients require housing loans to improve their existing property rather than to build their initial property. The research process incorporated interviews with 297 Delft residents, four focus groups, secondary research and a workshop attended by other non-profit researchers.