Timely loan repayments key to GPF’s ability to fund affordable housing developments

Financial sustainability is at the heart of everything the Gauteng Partnership Fund (GPF) does, as funding is critical to facilitating the delivery of affordable housing developments across the province.

As an agency of the Gauteng Department of Human Settlements (GDHS), one of the core business areas of the GPF’s mandate includes providing loans to private sector developers for the development of affordable rental and student accommodation, and social housing projects.

Timely loan repayments to the GPF are more than just a contractual obligation, they ensure that the entity can continue funding affordable housing developments. Thando Masango, Portfolio Management Officer at the GPF, says developers who meet their obligations contribute to a cycle that benefits future projects - enabling her organisation to provide safe and accessible housing for more communities in need.

Masango explains that non-payments mean there are no funds available to support new projects and that loan defaults also affect the GPF’s sustainability, and weaken its loan book. This, in turn, makes it harder for the entity to acquire additional funding from financial institutions.

“It makes it difficult for the GPF to access senior funding investments. Financial institutions look at our loan repayment track record when considering additional funding. If repayments are inconsistent, it affects investor confidence and our ability to secure funding for future developments,” she says.

Masango notes that the GPF believes in proactive engagement with beneficiaries to help them meet their repayment obligations, including regular communication, assisting developers with requests on time and being readily available for discussions. During the Covid-19 pandemic and the ensuing lockdown, the GPF offered payment holidays to assist ailing developers who saw higher vacancy rates in their properties.  

“We have several strategies in place to recover outstanding loans including the cession of rental income and bank accounts, litigation when all other efforts fail, and restructuring projects. Moreover, we also convert existing developments such as shifting the Entrepreneur Empowerment Property Fund (EEPF) projects to student accommodation where viable,” adds Masango.

GPF client Mandisa Ntshalintshali, who provides student accommodation, points out that low occupancy and high vacancies directly impact developers’ revenue streams, making it difficult to cover operational costs and meet loan repayment schedules. This creates financial strain, requiring companies to adjust budgets and seek ways to improve cash flow while maintaining essential services.

She says that to improve occupancy rates and reduce vacancies, her company employs various strategies. “Our most effective marketing asset has been word-of-mouth referrals from students who have previously stayed with us. We focus on creating a home away from home by providing comprehensive support to our residents. This holistic approach not only attracts new students but also encourages long-term retention, reducing vacancies and stabilising occupancy rates.”

While this year appears more promising in terms of occupancy, Ntshalintshali notes that her company’s financial performance is heavily influenced by external factors such as challenges faced by the National Student Financial Aid Scheme (NSFAS) and the University of Johannesburg.

“Delays and uncertainties with these institutions have impacted our cash flow, affecting our ability to meet financial obligations on time. We will provide a more detailed update on financial performance as the academic year progresses,” she says.

“However, the GPF has provided financial support during the downturn. Their flexible repayment options were critical in helping us restructure our financial approach and navigate the challenges effectively.”

Ntshalintshali says that one of the key lessons learned was the value of fostering a supportive and engaging environment for student tenants, by creating a space that feels like a home away from home and where students’ daily needs are met. This includes providing services such as complimentary laundry, regular cleaning and wellness activities – which have proven crucial for tenant retention and satisfaction.

GPF CEO Lindiwe Kwele says that while government funding supports some of the entity’s initiatives, loan repayments remain essential for maintaining financial sustainability. 

“We continue strengthening credit controls to reduce non-performing loans and increase collection rates as a strategic imperative for the GPF. We urge our valued clients to stay committed and meet their obligations, and be a part of the solution to Gauteng’s housing needs.”


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