Government Proposes New State ‘Housing Bank’ For South Africa

Phelisa Nkomo – Development Economist talks about South African finance minister Enoch Godongwana says that the national government is looking at launching a housing bank to provide loans to public sector employees and the gap market. <br /> <br /> Godongwana revealed the housing bank plans in an interview with CNBC Africa at the World Economic Forum’s annual meeting in Davos. <br /> <br /> He said the unions asked the government to replicate the Government Employees Medical Scheme (GEMS) to create a housing bank. <br /> <br /> “We agree with the unions that we should do a similar exercise as we did with medical aid by creating a state medical aid called GEMS,” he said. <br /> <br /> “We need a similar arrangement with public sector employees to create a housing bank to create loans for them.” <br /> <br /> The government housing bank would also provide loans to the gap market – people who earn too much to get RDP houses and too little to get mortgages from banks. <br /> <br /> Godongwana added that a fully-fledged state bank via the South African Post Office is also under development. <br /> <br /> “The challenge for a state bank was the regulatory framework. That regulatory framework is coming true,” he said. <br /> <br /> “The second issue is sufficient instruments for a state bank. There are discussions about whether we should merge African Bank with the Post Office to create a bigger state bank.” <br /> <br /> He added that the regulatory framework for a state bank would be similar to the regulations for any other bank. <br /> <br /> “When tailoring the state bank products, it will take that into account,” he said. “That process is in motion.” <a href="https://www.kaya959.co.za">kaya 959</a>