Pooling pennies to provide housing for the poor

Tuesday, 27 August, 2002 - 23:00

Dudley Moloi
   With his puppy in tow, Solomon Molefe’s cane taps its
way up the stairs. Sensing that his feet are now safely planted on the

Dudley Moloi

   With his puppy in tow, Solomon Molefe’s cane taps its
way up the stairs. Sensing that his feet are now safely planted on the
verandah’s flat floor, he searches for the security of the wall with his
cane-free left hand. With that done, Molefe feels the way into his new
house. The 75-year-old Molefe has been an active member of an initiative
by the poorest of the poor in Oukasie township to build houses for themselves.
During the nearly 10 years of his involvement in the do-it-yourself housing
project, Molefe saw many houses sprout where there had once been shacks.
But, in a sad twist of irony, he was unable to see his own house when
it was completed at the end of 1999 because he had lost his sight three
years earlier. However, Molefe has compensated for his loss of sight with
an acute sense of touch. He likes what he feels and concurs with the oft-made
compliment: “Yes, it’s a beautiful house. That’s what most people say.”
Molefe is one of 10,000 people who have secured homes of their own with
the support of the South African Homeless People’s Federation’s (HPF)
local savings clubs and housing development efforts. The HPF is a national
network of more than 1,200 community-based housing savings clubs representing
about 100,000 families.

members are women whose average household income is between R600 and R700
per month ($75 to $87.50).

   The Mott Foundation made an 18-month, $150,000 (R1.2-million)
grant to People’s Dialogue on Land and Shelter, which is a non-governmental
organization created to support HPF.

   A crowning achievement of the savings program is its Utshani
Fund. The HPF presently manages more than R60 million ($7.5 million) for
the Utshani Fund for land acquisition, housing development, income generation,
and other activities within the federation. The HPF savings clubs, in which
many members contribute as little as 50 cents ($0.06) on a daily basis,
were a leverage to attract the R60 million. Also, the fund serves as a conduit
for the government’s R15,000 ($1,875) housing subsidies for eligible South
HPF was formed in the early 1990s in response to the country’s massive housing
crisis. The crisis continues today with an estimated 8 million of the nation’s
41 million citizens listed as homeless.

   The house-building process includes these steps:
  • A local savings club is set up.
  • HPF volunteers daily collect contributions from members. The contributions
    are recorded in a member’s savings book.
  • Membership gives people access to low-interest (1 percent to 2 percent)
    loans for "crises," income-generation projects or housing construction.
    According to the HPF, there is an 80 percent loan repayment rate.

The HPF’s members
negotiate with local government and also provide volunteer labor and project
oversight, thus saving money that would be needed to pay commercial building
contractors. The extent of project involvement hinges on the technical training
of local members, who sometimes recruit additional expertise through a national
HPF member exchange program. As a result of the donated labor, a house can
be built for as little as R11,000 to R12,000 ($1,375 to $1,500).

   Much of the initial energy toward the establishment of
the Oukasie savings club came from resident Rose Molokoane, now the HPF’s
national chairperson. 1

   Molokoane was quick to recruit others to help with the
new housing program, including Sarah Shezi, now an enthusiastic volunteer
at the HPF Oukasie office.

   “This organization is not just about building houses,”
she said. “Building a house is a process toward building an individual as
the foundation from which problems are solved.”

1   Her family is known locally for
its involvement in the 1980s campaign against the forced removal of Oukasie
residents under apartheid. The black residents were said to be living
in a township situated too close to designated white areas.

Sarah Shezi, a volunteer at the HPF Oukasie office.

With that philosophy
firmly implanted in the collective mind of a pioneering group of 18 locals,
which included Molefe, members set out to put the theory into practice.
After a bit of struggling to gather enough money, group members literally
laid the foundation — with their own hands — for the structure that is now
the HPF’s Oukasie office. Volunteer Shezi proudly tells every visitor and
potential savings club member about the office’s rich history.

   Matele Tele, another founding member, recalls that getting
people to join the club was not easy.

   “At first our intentions were looked at with distrust.
This was understandable, because people are forever losing money to swindlers,”
she said.

   “We canvassed the community to contribute a bit of their
time or contribute as little as 10 or 20 cents to begin a process through
which they could build their own houses. People were very skeptical and
the general comments were, ‘How can one build a house with 10 or 20 cents?’
But eventually people joined us.”
own story is a compelling one. Against the strains of age and the scorching
heat, she pushes a cement-laden wheelbarrow to colleagues constructing a
house for another project member. The 67-year-old widow says she is tired
but continues to volunteer because she believes in the HPF’s work.

   Like Molefe, Tele moved into a new house in 1999 after
years of living in a house made of mud bricks that “washed off during heavy
rains.” Tele, who has two adult children living in socioeconomic circumstances
similar to hers, says she has not been employed since 1953 because of illness.
Her health condition was exacerbated by “the Boer beatings,” which occurred
during the forced removal of Oukasie residents in the 1980s.

   Tele now has a decent roof over her head, but it’s often
difficult for her to make ends meet with only a tiny monthly government
disability grant. However, as a member of the savings club, she can access
small loans in times of crisis.

a hard life, but my involvement in the project helps to ease things a bit.
I was alone, but now I am part of the group,” she said.

   For her, a sense of belonging is the ageless notion of
interdependence commonly described as African humanism or ubuntu. This concept
forms the basis of culturally ingrained communal philanthropy, although
it has been over-ridden by the twin forces of colonization (including apartheid)
and increased urbanization.

   Still, communal energy is alive in contemporary South
Africa in the stokvel or community savings club movement, which is active
in most townships. Apart from serving as social support groups among members,
who are mostly women, these grassroots-controlled saving plans are a collective
financial resource within marginalized communities. In addition to opening
the door to home ownership to those who wouldn’t otherwise have the option,
saving clubs enable people to buy shared automobiles and other high-priced

The housing program has helped provide shelter

    for families of all sizes.

at the time of the launch of the National Stokvels Association of South
Africa (NASASA) in 1988, Andrew Lukhele estimated that there were then 4,000
stokvels on the outskirts of Johannesburg. He said clubs averaged 10 members,
with individuals contributing between R50 and R100 ($6 to $12) fortnightly.
Back then, Lukhele estimated their combined annual savings potential to
be between R46 million and R96 million ($5.8 million to $12 million). Today,
the number is estimated to be much larger.

   Although organizations like NASASA have had success with
harnessing latent financial resources within marginalized communities, much
of NASASA’s efforts focus on people with steady, albeit meager, incomes,
particularly in metropolitan areas. Conversely, the HPF and the African
Cooperative Action Trust (ACAT) target rural areas, concentrating their
efforts on the “poorest of the poor.”
ACAT office based in the KwaZulu-Natal province works with 836 savings clubs
in eight districts of that rural province. Most of their community savings
programs are geared toward building shared assets such as schools and community
halls. Meanwhile, the HPF’s countrywide network of savings clubs revolves
around do-it-yourself housing projects, with combined savings in March 2000
reported to be in excess of R5 million ($600,000).

   Poor families often are without access to traditional,
bank-financed mortgages and other formal credit facilities because they
are regarded as a “risk group.”

   Sarah Ranuka falls into the high-risk category. She offers
her age as “70-something.” After spending more than 55 years as a domestic
worker in the affluent white suburbs of Johannesburg, Ranuka retired in
1998 with nothing to show for her toil.

joined the Federation in 1998 when I came back from Johannesburg after working
there since 1942,” she said. “I was ill from stress and high blood pressure.”

   But as a result of the Oukasie self-help housing program,
Ranuka moved from the “tin house” she inherited from her parents into a
new home in 2000. Her house is squeezed between two low-cost houses built
under the government’s Reconstruction and Development Program (RDP). While
her house is the result of a communal work project, private construction
companies built the two others.
Chairperson Molokoane said members experience positive results from pooling
their resources, which are reflected in HPF’s slogan: "Amandla
Imali Nolwazi."
When translated, the Zulu slogan means, "Money
is power and knowledge."

   “To be a member of the Federation is to be a member
of one big family, and one big family can talk with one big voice,” said
Molokoane. “The bigger the voice, the more the attraction — help from
government, businesses, individuals — and the more our achievements.”.

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