South Africa's government and the country's big retail banks are on the verge of sealing a 20 billion rand ($3 billion) deal to help low income families own their own homes, the Sunday Times reported on Sunday.
The newspaper quoted housing minister Lindiwe Sisulu as saying an outline agreement was in place for the government and the banks to take equal risk in lending to families with incomes of 7,000 rand or below per month.
Sisulu said she was hopeful that the government and banks will within weeks agree to include measures in the housing agreement which were part of a financial sector charter drawn up last year and aimed at giving black South Africans a bigger slice of the financial sector.
"The charter speaks of sharing the risk. The concept is agreed and by October we will have signed on the dotted line," Sisulu said.
The newspaper said the charter's original proposal was for banks to lend at least 20 billion rand over the first five years of the industry agreement.
The housing ministry was not immediately available for comment.
Earlier this month, the government pledged to move millions of slum dwellers into better housing within a decade and eradicate the apartheid-era squatter camps which are home to about 9 million people, or a fifth of the population.
The government's strategy aims to better housing subsidies for the poor, contribute 5 percent to a house deposit for low-income earners, and increased use of rental stock in urban areas.
South African mortgage lenders like banking groups Absa, Standard Bank, Nedcor and FirstRand have not concentrated on lending to the low end of the housing market, due to perceived high risk and low returns.
The African National Congress (ANC) government has spent 24 billion rand building 1.6 million houses since the end of apartheid white rule in 1994, but there is still a massive housing backlog.
The numbers are growing as the unemployed flock to the cities in search of work. At least one in three South Africans cannot find full-time jobs.
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