MEC for Human Settlements and Infrastructure Development Lebogang Maile and the GPF have launched a funding initiative for building backrooms in Gauteng townships. Picture: Independent Newspapers.
In a bid to enhance the township economy, the Gauteng Partnership Fund (GPF) and MEC for Human Settlements and Infrastructure Development Lebogang Maile recently launched a funding initiative for building back rooms in Gauteng townships.
The MEC said the Kasi4Real programme was introduced to address the housing shortage and formalise backyard developments in townships in Gauteng.
Speaking to Personal Finance, GPF CEO Lindiwe Kwele said the product was a real estate product to elevate townships.
“We believe that property is life, property is wealth, and we need to use our existence to catalyse and empower historically disadvantaged people, through property portfolio because we believe this is how you begin to create generational wealth.
“As the GPF, we set criteria on how we can assist real estate developers from the townships, and the key criteria is that you have to be in the jurisdiction of Gauteng because as the GPF, we are only operating at the Gauteng city region.“
Kwele said that to qualify, the person applying must have a title deed to the property, because the GPF would help them develop in their backyard.
“The structure that we can finance must be a minimum of four bachelor units, but if your yard is bigger you can double and triple that amount.
“You need to have adequate and all the municipal plans approved, if there are other people on the title deed, they must authorise you to lead and be the contracting party with the GPF. It must be a company, we don’t deal with individuals, you must register a company, and as the GPF we will also hold your hand during the process. We also have a compulsory training programme that must be attended by the people seeking the financing.
“We don't want to set you up for failure so it is important that is dealt with upfront. Our rate is favourable compared to commercial banks. We also ensure that you have a solid professional team, construction team that will assist you to put together a structure that is solid and that will hold and stand climate change,” she said.
Kwele said the funding was not restricting anyone to brick and mortar. The GPF is also open to alternative technologies like prefabricated units.
"We fund up to 90% of the product, and you are expected to bring in 5% of equity as a developer," she said.
Kwele said she would like to encourage women to join the programme.
“You might start small with the back room, but you can end up being a property mogul.”
Maile said that as the programme continued, some requirements would be adjusted.
"We would like to also incorporate some university students to offer building plans to the recipients of the fund, to make it easier for the plans to meet the city's requirements".
He said he saw the initiative as a great way to help increase the township economy which according to studies, was worth about R100 billion.
Mogale City mayor Danny Molefi Thupane said: “We want to give our support to this initiative because in townships, when most people had taken their pension funds upon retirement, they start to spend the money, and in a few months, there is nothing left to survive as a family. When they leave this earth, children and families left behind are mostly left destitute. We welcome this programme as the city as it will leave families with an income.”
PERSONAL FINANCE