The Government Employees Pension Fund (GEPF) has invested R10.5bn into SA Home Loans to help improve housing finance for government employees and the public.
With more than 1.2 million active members and assets worth R1.6trn, the GEPF is Africa’s largest pension fund.
The deal, through its investment manager Public Investment Corporation (PIC), aims to provide government employees and qualifying members of the public with end-user home finance and development finance for approved affordable housing projects.
The investment will see R5bn being made available for public service employees, R2bn for affordable housing end user financing, R2bn to enable SA Home Loans to extend home loans to the rest of qualifying home loan applicants, and R1.5bn will be used to fund affordable housing developers.
“This investment is an expression of confidence in our service offering,” said SA Home Loans CEO Kevin Penwarden.
“We believe we have the necessary capacity and skills to deliver excellent home financing services to clients that will be coming through the GEHS platform, as we have consistently done with all our clients.”
The PIC is intentionally implementing a developmental investment mandate, explained PIC board member Dr Claudia Manning. It “primarily seeks to achieve two types of returns, namely: financial and social returns,” she said.
“Financial return means that PIC must generate profit for clients and social return means our investments should positively affect the social conditions of the stakeholders.
“Our view is that members of the GEPF should benefit during their active working years and during retirement – and this is a social return.”
A lack of access to housing has been identified by the National Development Plan (NDP) as one of the challenges facing South Africa.
“We believe there are many GEPF members who often do not qualify for bank-issued housing loans and housing subsidies offered by the government,” said GEPF boss Abel Sithole.
The Government Employees Housing Scheme (GEHS), an agency of the Department of Public Services and Administration, will assist government employees to access funding from SA Home Loans.