Finance Minister Enoch Godongwana reveals plans for a state housing bank

Another announcement from the South African government and finance minister Enoch Godongwana is that the national government is looking at launching a housing bank.

The state bank will provide loans to the public sector employees and the gap market as he announced in an interview with CNBC Africa at the World Economic Forum’s annual meeting in Davos.

Godongwana said the unions asked the government to replicate the Government Employees Medical Scheme (GEMS) to create a housing bank.

“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.

“We need a similar arrangement with public sector employees to create a housing bank to create loans for them.”

Media reports coming to BusinessTech Africa indicate that the government housing bank would also provide loans to the gap market – and people who earn too much to get RDP houses and too little to get mortgages from banks.

Godongwana added that a fully-fledged state bank via the South African Post Office is also under development.

“The challenge for a state bank was the regulatory framework. That regulatory framework is coming true,” he added.

“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.

“When tailoring the state bank products, it will take that into account. That process is in motion.”