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PRESENTATION TO PARLIAMENT PORTFOLIO COMMITTEE
NURCHA: BACKGROUND & BUSINESS PLAN AND BUDGET 2009/10
Presented by Cedric de Beer
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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
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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
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OUR VISION
TO BE REGARDED AS A PARTNER OF CHOICE FOR
THOSE SEEKING INNOVATIVE BRIDGING FINANCE
SOLUTIONS
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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
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PROGRAMMES
NURCHA LENDS TO
1. SMALLER CONTRACTORS
2. MEDIUM & LARGER CONTRACTORS & DEVELOPERS
BUILDING
1. SUBSIDY HOUSING
2. AFFORDABLE HOUSING
3. COMMUNITY FACILITIES AND INFRASTRUCTURE
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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
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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
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LOAN VALUES BY PROVINCE
Gauteng42%
KwaZulu Natal11%
Free State14%
Limpopo7%
Western Cape10%
Eastern Cape7%
Northern Cape0%
North West5%
Mpumalanga4%
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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
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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
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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
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BUDGETARY IMPLICATIONS
1. INCREASED SPENDING ON SYSTEMS DEVELOPMENT
• ICT COSTS• CONSULTANTS
2. INCREASED BRANDING COSTS
3. NO OTHER OVERHEADS FOR NEW REGIONAL OFFICES
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BUDGET BALANCE SHEET
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BUDGET INCOME STATEMENT
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MAJOR ITEMS OF EXPENDITURE