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Master of Ceremonies
Honourable councillors
The Banking Council
Ladies and Gentlemen

The main focus of the government's housing policy and strategy remains the alleviation of poverty, homelessness, landlessness and unemployment among our people. For the past seven years the housing delivery programme and strategy have yielded 450 000 jobs, made more than five million people proud occupants of decent housing and given a further 377 000 households secure tenure through the transfer of old municipal houses to them.

In so doing, our government has invested R16bn in asset base for low cost housing and R28bn in the form of old municipal houses. Furthermore, the housing development programme has given opportunity to emerging contractors to actively participate in the economy of our country and create more job opportunities for the previously disadvantaged communities.

Our government believes that those who wish to see no poor people within their societies and have the zeal to improve their lot can only care for the plight and interests of a poor man. This conviction has informed our approach in forging partnerships and joint ventures as government.

The roots of Servcon are anchored in the richness of the solid partnership between the government and the private sector and it is this relationship that bears a beacon of hope for our economically depressed housing beneficiaries.

Servcon, as a product of shared responsibilities between government and the banks, has demonstrated the importance of efforts in our struggle for the improvement of the lives of our people.

The government's housing programme puts more emphasis on job-creation and skills transfer and our primary aim is to create and build complete communities rather than mere erection of housing structures. Every housing project that has been implemented by the government since 1994 has not only delivered housing units, but has left essential building and administrative skills within communities as well as small enterprises that have helped sustain development in our communities.

As shall be remembered, Servcon's primary objective is to normalise the housing situation and among its programmes is the rightsizing programme, which provides loan defaulters the option to move into alternative affordable houses through Thubelisha Homes.

Other programmes administered by Servcon include a rental option, a buy back option and special assistance for the aged and disabled, all of which are in line with the housing policy and programme.

But Servcon has shown that the mere arrangement of alternative affordable housing and loan repayment is not enough. The introduction of the Servcon Clubs has definitely come at the right time and we hope these clubs will bring in the necessary skills and financial boost through the envisaged training and financial support programmes to the clients and help the people generate income for their households.

For this I want to thank ABSA for providing this initiative with a house to be used for training and economic activities and I support the involvement of all other stakeholders in making this initiative a success.

I have been assured that the feedback from our people is positive and I am encouraged by the fact that our people view this concept of Servcon Clubs seriously and realise that it is essential to their future financial rehabilitation.

Servcon itself has limited resources and I hope various stakeholders, banks, NGOs and other private sector organisations will support these initiatives with funding and expertise and would like to thank those who have already pledged their support of the initiative.

The aim of these initiatives is to set up structures whereby support is given to the clients who are trying to improve their financial circumstances through small business ventures. This because we all realise that the overwhelming original cause of default was economic hardships caused by mainly loss of job and financial support from a breadwinner through death and other means.

The most important aspect of this initiative is that it is going to benefit a total of 33 319 households forming part of the original portfolio of Servcon who have a problem in repaying their bonds to the banks and were assisted by Servcon to sign new agreements or to be relocated to the alternative affordable houses.

The encouraging factor is that these people we are trying to help have shown great interest in improving their situation by making great strides towards normalising their financial status. This can be measured through the success made by Servcon in trying to normalise a ring-fenced portfolio of loans from banks consisting of non-performing loans and properties in possession.

As I have already mentioned, the original portfolio was 33 319 properties with an outstanding balance of R1, 278 million. The current portfolio as at the end of April 2001 is 23 204 properties with an outstanding balance of R863 million.

The number of agreements signed by the end of April 2001 was 19 467 which represented 69,7% of the total portfolio.

The housing sector is currently facing some challenges, which will need the collective efforts of all of us to resolve. Among these challenges are:

*high levels of unemployment and poverty
*structural defects
*lack of financial discipline among beneficiaries and
*in certain instances poor community leadership

In order to inculcate the culture of savings for housing, the government is going to launch the long awaited National Housing Savings Programme at the end of this month. We would like Servcon to continue to work closely with NURCHA to ensure that these job creation initiatives make meaningful contribution to the Savings Programme as a measure to facilitate their future housing improvements.

Issued by Ministry of Housing

20 July 2001