FNB awards creation of new finance scheme

Thomas McLachlan

Thomas McLachlan

First National Bank (FNB) last night awarded one of its business units R1million for developing Smart Bond, an innovation that has opened up access to housing bonds to more South Africans, the bank said yesterday.

This year's winning team, the low-income housing unit at FNB, combined commercial property financing and end-user finance to make loans more easily available to markets that were previously ignored by financial institutions. It is designed to help people earning a total household income of between R2500 and R10000 a month.

The concept was recognised for its originality, which produced several key benefits for both developers and buyers in the housing market.

"The winning business approach offers a one-stop finance solution for housing developments by bringing two previously unrelated business units together," said Michael Jordaan, FNB's chief executive.

"This has not only opened doors for developers keen on entering the township market, but also offers affordable housing finance, through the Smart Bond offering for potential buyers who would otherwise not qualify for a regular bond."

The model was successfully used during the development of more than 7000 housing units valued at R1,7billion.

This included three major housing projects across the country - Glenridge in Soweto, Cosmo City north of Johannesburg and the N2 Gateway in Cape Town's Langa township.