In South Africa, Proparco supports TUHF and the access to affordable housing

TUHF has recently expanded its lending activity into historic “township’ areas that were previously underdeveloped. This project will assist in revitalizing township economies and help entrepreneurs operating in these areas in the interests of inclusive growth and development. A portion of the total financing (3 million euros) will be allocated to uMaStandi (a subsidiary of TUHF) that operates in these lending areas.

This line of credit is included in the "EFSD COVID" guarantee program granted by the European Union (EU) to Proparco. This program, set up at the end of 2020, enables Proparco to support, thanks to the EU guarantee, financial institutions targeting SMEs in Sub-Saharan Africa and the EU Neighborhood zone. These institutions are mainly MFIs and specialized non-banking institutions, such as TUHF.

TUHF, a unique player in the South African landscape

For over 19 years, TUHF Limited has been financing small-scale entrepreneurs investing in the affordable rental housing market through the rehabilitation of existing inner-city buildings or the construction of new buildings in major South African cities. TUHF plays a key role in financing the housing market in support of the low to middle income population, in line with the national strategy to facilitate access to housing. To date, TUHF has financed more than 44,400 homes, 95% of which are affordable housing. Since 2016, TUHF has also integrated environmental requirements into its funding assessments in order to promote energy efficiency standards as much as possible.

TUHF offers its clients both financial support via long-term loans and non-financial support (property and general business management training and mentorship, networking opportunities with fellow investors and tailored one-on-one support on specific client issues, such as, managing construction, navigating town-planning requirements and property management). TUHF also has a particular focus on the advancement of women and has developed a Gender Action Plan that aims to promote female clients and therefore female entrepreneurship. As a result, TUHF qualifies for the 2X Challenge, an initiative launched in 2018 by several DFIs in favor of strengthening the economic role of women in developing countries.

“The facility that we have concluded with Proparco is the first funding transaction that we have completed with an international DFI. We are confident that this funding will assist us to continue making a significant impact in the provision of housing and improvement of the urban environment in our major cities. With the rapid pace of urbanization in South Africa, we hope that this transaction will open the doors to further international funding to support housing in South Africa”, says Paul Jackson, CEO of TUHF.

A project that addresses the significant challenges of affordable housing

Proparco's financing will contribute to increasing the supply of affordable and quality rental housing (around 1,300 new housing units) in good locations (close to business areas, urban centers, and transportation networks). It will benefit South Africa’s lower[1] income households, including in Townships where TUHF is eager to expand its model and offer quality housing solutions to still underserved populations.

« This operation will have a strong and relevant social impact in South Africa. It fully embodies Proparco's strategy of supporting players who deliver solutions that address existing inequalities such as access to affordable housing » says Emmanuelle Riedel Drouin, Global Head Lending Operations of Proparco.

« Proparco is proud to be supporting the innovation and impactful work that TUHF is undertaking in the context of South Africa’s severely underserved affordable housing market. Through this financing, Proparco will contribute towards addressing the spatial and accompanying socio-economic inequalities of South Africa’s metros, while simultaneously supporting access to finance for emerging entrepreneurs operating in the South African property space. » says Nadia Kruger-Levy, Financial Institutions Investment Officer for Proparco Southern Africa.