presentation to parliament portfolio committee nurcha: background & business plan and budget...

PRESENTATION TO PARLIAMENT PORTFOLIO COMMITTEE

NURCHA: BACKGROUND & BUSINESS PLAN AND BUDGET 2009/10

Presented by Cedric de Beer

NURCHA IS

• A DEVELOPMENT FINANCE INSTITUTION

• A PUBLIC ENTITY

• A SECTION 21 COMPANY (TAX EXEMPT)

• A JOINT VENTURE:

– GOVERNMENT OF SOUTH AFRICA

– SOROS ECONOMIC DEVELOPMENT FUND

JV AGREEMENT RENEWED IN AUGUST 2005

OUR MISSION

NURCHA INITIATES PROGRAMMES AND TAKES

CONSIDERED RISKS TO ENSURE A SUSTAINABLE FLOW

OF FINANCE FOR THE CONSTRUCTION OF LOW-INCOME

AND AFFORDABLE HOUSING, COMMUNITY FACILITIES AND

INFRASTRUCTURE. WE WORK IN PARTNERSHIP WITH ALL

ROLE-PLAYERS IN THESE MARKETS TO MAXIMISE THE

DEVELOPMENT OF SUSTAINABLE HUMAN SETTLEMENTS

OUR VISION

TO BE REGARDED AS A PARTNER OF CHOICE FOR

THOSE SEEKING INNOVATIVE BRIDGING FINANCE

SOLUTIONS

CURRENT MANDATE

NURCHA ENSURES AVAILABILITY OF BRIDGING FINANCE

TO SMALL, MEDIUM AND ESTABLISHED CONTRACTORS

BUILDING LOW AND MODERATE INCOME HOUSING AND

RELATED COMMUNITY FACILITIES AND INFRASTRUCTURE

PROGRAMMES

NURCHA LENDS TO

1. SMALLER CONTRACTORS

2. MEDIUM & LARGER CONTRACTORS & DEVELOPERS

BUILDING

1. SUBSIDY HOUSING

2. AFFORDABLE HOUSING

3. COMMUNITY FACILITIES AND INFRASTRUCTURE

NURCHA’S DEVELOPMENT OUTPUTS SINCE 1996

Number of loans made 1 128

Value of loans R1.6 billion

Value of projects R9.9 billion

Total houses in projects 316 000

Houses built 225 850

DEVELOPMENT OUTPUTS FOR NURCHA’S FINANCING PROGRAMME FOR THE YEAR APRIL 2008 TO MARCH 2009

Subsidy Housing

Affordable Housing

Emerging Contractors:

Infrastructure & Community Facilities,

TOTALS

Loan contracts signed 60 12 64 136

Value of loans R169.6m R93.3m R149.9m R412.8m

Value of projects R1,268.7m R487.4m R928.9m R2.7 billion

LOAN VALUES BY PROVINCE

Gauteng42%

KwaZulu Natal11%

Free State14%

Limpopo7%

Western Cape10%

Eastern Cape7%

Northern Cape0%

North West5%

Mpumalanga4%

ENVIRONMENTAL REVIEW

1. CREDIT CRUNCH & RECESSION

• CONSERVATIVE BANKS• FEW BANK LOANS• FEW BUSINESS LOANS• LESS CONSTRUCTION ACTIVITY• IMPORTANT TIME FOR DFI’S

2. SUBSIDY HOUSING• EXPECTED GROWTH IN OUTPUTS• MORE LARGER CONTRACTORS

ENVIRONMENTAL REVIEW

3. AFFORDABLE HOUSING

• PREDICT DEFINITE DECLINE IN SALES• OPPORTUNITY FOR GROWTH IN RENTAL• INCREASING DEMAND FOR NURCHA FINANCING

4. COMMUNITY FACILITIES & INFRASTRUCTURE• GROWTH IN BUSINESS• MORE ESTABLISHED CONTRACTORS

NURCHA’S ORGANISATIONAL DEVELOPMENT PLAN

1. OPEN FIVE REGIONAL OFFICES

2. PROJECTS IN AT LEAST EIGHT PROVINCES

3. MAJOR FOCUS ON CUSTOMER RELATIONS

4. ENHANCED PROJECT CONTROL AND REPORTING

CAPACITY

BUDGETARY IMPLICATIONS

1. INCREASED SPENDING ON SYSTEMS DEVELOPMENT

• ICT COSTS• CONSULTANTS

2. INCREASED BRANDING COSTS

3. NO OTHER OVERHEADS FOR NEW REGIONAL OFFICES

BUDGET BALANCE SHEET

BUDGET INCOME STATEMENT

MAJOR ITEMS OF EXPENDITURE