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Rural Housing Loan Fund in South Africa

Naya Pakistan Housing Program | > Rural Housing Loan Fund in South Africa

What is Rural Housing Loan Fund?

Rural Housing Loan Fund (RHLF) is one of the Human Settlements Development Finance Institutions, which was established by the national government in 1996. Rural Housing Loan Fund (RHLF) is in a process of being consolidated to the National Housing Finance Corporation (NHFC) as the first step towards establishing the new Human Settlements Development Bank (HSDB). RHLF’s mandate is to facilitate access to incremental housing finance for households in rural areas to improve their housing conditions and living environments in supporting sustainable rural human settlements. Currently RHLF facilitates access to unsecured housing credit for borrowers earning up to R15 000 per month. Low income household’s benefits from RHLF funding to improve their housing and living environments in various ways such as:

  • Extending or improving the quality of an existing house such as an RDP house, or
  • Adding to own savings to build a new house, or
  • Connecting electricity or water to your house, or
  • Improving sanitation conditions such as building a sceptic tank, or
  • Buying land to build own home, or
  • Fencing a home to enhance security.

Delivery model
RHLF delivers on its mandate through carefully selected intermediaries that include commercial retail lenders that are registered with the National Credit Regulator (NCR) who provide loans to the general public. Through these retail intermediaries, RHLF is able to reach all provinces in a cost-effective manner. RHLF also works with community based organisations such as stokvel groups and cooperatives that lend to their members only.

RHLF achievements
Since inception to end of March 2017, RHLF has achieved the following:

  • Facilitated delivery of 540 621 incremental loans in rural areas through its intermediaries.
  • Disbursed just over R1.7 billion to the rural housing market. This has been enabled by the fact that RHLF funds are repaid, i.e. are not grants.

Examples of people who are benefited from RHLF facilitated loans
Ms Sophy Mkhatshwa, Bisonto, Bushbuckridge Municipality, Mpumalanga Ms Mkhatshwa is a single parent who stays with her five children. She works in the public sector and earns an income which is below R15 000 per month. The borrower took a loan of R32 964 in June 2016 from a RHLF approved intermediary, Thuthukani Housing Finance. She used the loan and her savings to build a new house (as per in the picture). The borrower is very happy with the service received from Thuthukani.

Concluding Remarks
Housing microfinance or incremental housing finance should be recognized as part of the traditional finance mechanism for the low-income earners. Many people have succeeded in improving their housing conditions by taking loans and incrementally build houses that suit their family needs as the examples shown. RHLF is proud that is has assisted many professionals such as teachers and nurses to access unsecured housing loans and have built decent homes over the years and remained to live in rural communities where they work, rather than migrating to urban centres. This is critical in supporting rural development and sustainable rural human settlements.

Source: Rural Housing Loan Fund (RHLF) Website:

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