In South Africa Private-Public Participation is Bringing Access to Affordable Housing


In South Africa, a mix between government assisted programs and private-sector led initiatives are serving low-income populations earning less than 7,500 rands per month. Public sector motivation and support from the French Development Agency are proving to be major mobilizing factors.



  • Encourage the construction and marketing of affordable housing for low-income households
  • Develop tailored home-loan products for the low-income segmented


Since the end of apartheid in 1994, the government of South Africa has made increasing access to affordable housing a target priority. Their actions started with their Reconstruction and Development Programme (RDP), aimed at housing the 2 million people earning less than 3,500 rands. The RDP has been transformed into a new initiative known as Breaking New Grounds (BNG). The BNG initiative is an improvement from the RDP in that it does more than just ensure that more affordable homes are delivered. The BNG adds that homes must be built in settlements that are sustainable and habitable. The homes built in the BNG program are larger (40 square meters as opposed to 20 – 30 in the PNG) and have architectural plans that are more conducive to a quality living environment. The BNG also focuses on ensuring new homes have access to basic services such as schools, clinics, and commercial opportunities.

While the BNG has made significant progress, it is still very much a social housing scheme, targeted at the poorest populations or the “assisted sector”. There is also a need to provide services to the segment earning less than 7,500 rands per month and for this, the private sector and commercial banks must be engaged.

With the government’s motivation and working within the framework of the Financial Charter, commercial banks committed to providing financing of up to 42 billion rands to households earning less than 7,500 per month. In 2007, The French Development Agency signed an agreement that provided 440 million rands to three of the four major commercial banks in order to support their efforts to implement housing financing solutions for low-income populations.  Among these top banks was ABSA, a subsidiary of Barclays.

ABSA then launched a housing finance product called “MyHome” to facilitate access to home loans for the low-income segment. The MyHome products includes flexible repayment terms of up to 30 years, free home-loan training, a choice between variable or fixed interest rates, and many more offers tailored to the particular income segment. ABSA has created tailored financial products for income segments earning less than 7,500 rands per month, less than 11,000 rands per month, and less than 20,000 rands per month. In addition to the services provided to customers, ABSA also organizes trainings for the professionals of the affordable housing sector and organizes yearly forums that engage both the private and the public sector. In South Africa, ABSA has demonstrated the importance of involving both the private and public sector in the housing finance process, but also the importance of creating tailored solutions for each segment of low-income populations. 


Improving access to affordable housing improves economic development, creates employment, and supports social inclusion. These programs have financed more than 4,600 households with a monthly income of less than 7,500 rands. Two training facilities have been established to help increase the affordable housing supply.