South African finance minister Enoch Godongwana says that the national government is looking at launching a housing bank to provide loans to public sector employees and the gap market.<\/p>\n
Godongwana revealed the housing bank plans in an interview with CNBC Africa at the World Economic Forum\u2019s annual meeting in Davos.<\/p>\n
He said the unions asked the government to replicate the Government Employees Medical Scheme (GEMS) to create a housing bank.<\/p>\n
\u201cWe 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,\u201d he said.<\/p>\n
\u201cWe need a similar arrangement with public sector employees to create a housing bank to create loans for them.\u201d<\/p>\n
The government housing bank would also provide loans to the gap market \u2013 people who earn too much to get RDP houses and too little to get mortgages from banks.<\/p>\n
Godongwana added that a fully-fledged state bank via the South African Post Office is also under development.<\/p>\n
\u201cThe challenge for a state bank was the regulatory framework. That regulatory framework is coming true,\u201d he said.<\/p>\n
\u201cThe 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.\u201d<\/p>\n
He added that the regulatory framework for a state bank would be similar to the regulations for any other bank.<\/p>\n
\u201cWhen tailoring the state bank products, it will take that into account,\u201d he said. \u201cThat process is in motion.\u201d<\/p>\n
This article was first published on Daily Investor and was reproduced with permission. Read the original here<\/a><\/strong>.<\/em><\/p>\n
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