Low-income home building loan

Some 90,000 houses are to be built in South Africa over the next five years as a result of a US $20 million financing agreement with the US Overseas Private Investment Corporation (OPIC) and Soros Foundations Network. The funds will provide a revolving credit facility for the National Reconstruction and Housing Agency (NRHA) to provide start-up capital for small-scale, mainly black-owned contractors building low-cost housing. "Typically they (small-scale construction firms) need 10 to 20 percent of the project value as bridging finance," NRHA boss Cedric Debeers told IRIN. "The banks have been reluctant to lend to this market." South Africa has a low-income housing backlog of around 2.2 million units. The government allocates around $400 million in subsidies to house-building each year, which finances the construction of around 150,000 units annually. OPIC, a development agency of the US government, will provide $15 million and Soros Foundations Network $5 million of the project amount. The funds will be held by South Africa's Rand Merchant Bank. The initiative is expected to provide shelter for up to half a million people.