National Urban and Reconstruction Agency (NURCHA)

Background

Nurcha, a Section 21 Company, was established in 1995 and financed primarily by the South African Government and the Open Society Institute of New York.   Additional finance has been raised at different times from the Swedish, United States and Norwegian governments and through the Future growth Fund, Overseas Private Investors Corporation, Shared Interest and Rand Merchant Bank and other South African Financial Institutions.

NURCHA’S FINANCING PROGRAMMES

1. LOANS TO EMERGING CONTRACTORS

Subsidy housing, serviced sites, infrastructure and sub contractor finance

Nurcha lends to small/emerging contractors building subsidy housing under a carefully managed programme through it’s RMB Loan Fund and other financing products.  Nurcha has agreements with financial intermediaries who channel bridging finance to small contractors.

These loans are for the full bridging finance required and are subject to interest and administration fees to cover the costs of project and financial management services.

2. LOANS TO ESTABLISHED CONTRACTORS

Subsidy housing, infrastructure and community facilities

Nurcha lends directly to larger established developers and contractors building subsidy housing, infrastructure and community facilities.

3. CREDIT LINKED HOUSING

Nurcha administers a fund created by government to provide bridging finance for established contractors involved in building and selling houses with a sale price of between R50 000 and R 200 000.

All loans are for a maximum of 70% of the project bridging finance required and are subject to interest.

4. FINANCING RENTAL HOUSING

Nurcha provides finance and guarantees for the construction and upgrading of rental stock for the affordable housing market sector.  Nurcha decided to exit this market segment as it is well supported by other market lenders. In addition, Nurcha’s financing programmes are essentially short term bridging, whereas rental projects require financing of 10 to 20 years.

Nurcha has played a role in the financing of more than 150 000 houses, since inception. In the process, Nurcha has supported more than 450 contractors and developers who may not have been able to raise the bridging finance needed for nearly 600 contracts to build houses for the homeless.