The effectiveness of IDC in financing the construction of low cost or RDP housing

Mahashe, Mawande Victor (2015-04)

Thesis (MDF)--Stellenbosch University, 2015.


ENGLISH ABSTRACT: The non-availability of funding for low-cost housing is a major stumbling block in the provision of housing for the poor in South Africa (Moss, 2001). Banks and other commercial institutions are generally reluctant to fund construction companies in this industry in view of the high level of risk involved. The Industrial Development Corporation of South Africa is a development finance institution that is involved in the financing of construction companies. This study looked at the effectiveness of IDC in financing construction companies that are involved in low cost housing development. The study also looked at whether the IDC's strategiC objectives of promoting job creation had been achieved by providing funding to the construction companies. Only those companies involved in low-cost housing as the only or part of their business activities have been chosen for the study. A qualitative method of research analysiS has been selected as the best way of analysing the research findings in this paper. The empirical analysis indicated that generally the respondents are satisfied with the funding provided by the Industrial Development Corporation, but have serious concerns regarding the turnaround times for credit approvals, completion of legal agreements, disbursement of funds and the fees charged.

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