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Nedbank gets R400m loan for housing

12 Oct 2006

The French Development Agency (AFD) has offered a soft loan to Nedbank in support of its new home loan for low-income households. – I-Net Bridge

The French Development Agency (AFD) has offered a soft loan of about R400m (40m €) to Nedbank in support of its new home loan for low-income households.

The agreement was signed recently in Johannesburg. The home loan, called Sakhile, forms part of a financial package developed by the AFD and Nedbank to increase access to affordable home loans in South Africa.

Through AFD's financial support, up to 3,500 previously disadvantaged households will become home owners. The home loan will cater for households in the R2,500 and R5,000 income brackets.

The Sakhile loans will be advanced at a fixed rate in accordance to market rates. Due to the lower soft loan cost of funds, part of the funding will be used to provide financial education to borrowers.

All customers will be assisted by a financial mentor from the moment they apply for a Sakhile loan until they have repaid it.

Vincent Rousset, regional director of AFD, said: "The French Agency for
Development's involvement in South Africa spans 12 years and we are confident that Nedbank will offer a sustainable solution for financing the homes of the lower income market. Should this market-first solution prove successful, the AFD will consider further investments." – I-Net Bridge

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Nedbank gets R400m loan for housing

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