SA Affordable Housing May - June 2019 // Issue: 76 | Page 8

NEWS
TUHF and partners
ignite SA’s inner cities
Inner city property development scheme succeeds is creating 2 411
new permanent jobs and 5 126 short term jobs across South Africa.
In its 13 years of existence, TUHF has financed more than
R4-billion of inner city residential rental property units.
T
he Jobs Fund (JF), a R9-billion facility set up by
government in 2011 to co-finance public, private and
non-government projects for the purposes of job
creation, partnered with TUHF Limited (TUHF) in a move to
ignite development in inner cities across South Africa by
encouraging entrepreneurs to transform old buildings into
residential homes.
TUHF is an on-lending financial services provider that
provides access to finance for entrepreneurs and small and
medium enterprises (SMEs) to purchase, and subsequently
convert or refurbish buildings in the inner cities of South
Africa into affordable residential units for rental.
The JF partnered with TUHF in February 2015 via a
R157.5-million grant which was subsequently matched
with R1.06-billion raised through a domestic medium-term
note programme. By March 2018 the partnership had
succeeded in creating 2 411 new permanent jobs and
5 126 short-term jobs in inner cities across the country.
“This partnership has succeeded in addressing two key
development challenges faced by South Africa, namely
access to finance for budding property entrepreneurs as
well as decent and affordable accommodation close to
places of economic opportunity,” says Najwah Allie-Edries,
head of the Pretoria-based JF. “In addition, it has also
addressed a third challenge – unemployment – by creating
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MAY - JUNE 2019
a number of jobs in areas that are facing a constant influx
of new job seekers.”
In its 13 years, TUHF has financed more than R4-billion
in inner city residential rental property and currently has
a loan book of more than 34 000 residential units.
Entrepreneurs are screened using TUHF’s well-developed
character-based assessment method which considers
the entrepreneurs’ ability to find, develop and manage
properties that enables them to build thriving
property enterprises.
The TUHF prides itself on its hands-on approach and
specialised knowledge of the complexities of inner cities,
which allows them to take on the risk of financing the
purchase, construction and management of affordable rental
housing by private entrepreneurs in areas marred by urban
decline.
It also assists with the capacity building and up-skilling of
SMEs through training interventions such as the TUHF
Programme for Property Entrepreneurs (TPPE) training
sessions, which are facilitated and accredited by the
University of Cape Town. These classes leverage the
knowledge of industry experts to educate entrepreneurs on
construction-related topics and provide them with practical
skills that they can use in managing and growing their
property businesses.
“One of our main objectives in providing the grant is to
enable TUHF to secure additional sources of funding from
capital markets, which in turn boosts its ability to finance a
greater number of entrepreneurs,” says Allie-Edries. “We far
exceeded our objective in that not only have we showcased
the ability to change market behaviour by encouraging
investment in redlined inner city properties, but we have
also highlighted the powerful role that on-lending can play
in the development space.”
A post-project analysis shows that the majority of the
beneficiaries, who were interviewed for their views, reveal
that they had either limited or no access to capital prior to
TUHF’s intervention. Thanks to the JF-TUHF partnership
beneficiaries can employ about three staff members for
each medium to large building they have refurbished.
A TUHF Beneficiary Focus Group Discussion also reveals
that, in a group of five participants, about 100 additional
jobs are sustained.
“On-lending presents an opportunity to facilitate the flow
of the much needed funds from the large pool of capital
available to SMEs, that are expected to be the significant
contributors to job creation,” says Allie-Edries. “On-lenders,
who are niche market intermediaries, use their niche
expertise to leverage funds and make these funds available
to entrepreneurs who cannot access commercial funding.”
www.saaffordablehousing.co.za