Results of a face-to-face interview-survey conducted in 9 province of 930 borrowers Survey conducted by: Progressus Research & Development.

RHLF IMPACT ASSESSMENT:

2010Results of a face-to-face interview-survey

conducted in 9 province of

930 borrowers

Survey conducted by:

Progressus Research & Development

CONTENT Methodology

Demographic profile of Borrowers Loan Description Loan Outcome Loan Impact What impacts on Loan Outcome?

The Borrowing Experience Consumer Education

Challenges in Research

Conclusion

METHODOLOGY: SAMPLE Combined Loan book -Total RHLF loan book per

Province Verified “suburbs/villages” (Google Earth) 3 random points selected per Province Cluster points -> All towns/ cities/ villages

closest to this cluster point were marked. Borrowers listed within these towns/ cities/ villages from all Lenders were included in the sample frame for the Province.

Cluster expanded where necessary to reach target sample size.

Sample frame -> randomised. A final sample list was prepared of borrowers

who are traceable.

METHODOLOGY: DATA COLLECTION

Training of Interviewers, and Supervision of fieldworkers essential

Sampled Borrowers were traced by employing the following means: Telephone appointments made for an interview. Home addresses were traced and Borrowers

were interviewed immediately where possible, or an appointment made for later

Work addresses were followed to find respondents at work – interview scheduled, as well as appointment made to visit the home after work to obtain the GPS reference point and picture.

Methods used interchangeably (up to 3 visits)

METHODOLOGY: SAMPLE RESULT

Lenders Sampled Borrowers

Weighted Sample according to

number of Loan

Sample Accuracy: Sample is accurate in 95% of cases within a

range as specified

Bayport 98 44 467 10.00%

Elite 84 1 145 10.30%

Indlu 92 1 390 9.88%

Izwe 99 30 724 9.83%

Kuyasa 90 1 743 10.00%

Lendcor 98 25 951 9.88%

Mafori 95 5 593 9.97%

Norufin 92 1 290 9.85%

RPH 90 1 408 10.00%

Vecto 92 3 656 10.09%

RHLF TOTAL 930 117 367 3.20%

DEMOGRAPHIC DESCRIPTION OF BORROWERS

WHO ARE THE BORROWERS? SLIDE 1 OF 3:

Gender: 50.5% Male Average age: 48 years old High employment rate

Private sector (two thirds) Government (third)

Income Individual income: R6,821 Household Income: R9,111

Household Size: 5 people 59% Nuclear families; 23% Single parent families; 12.8% Singles/ Singles Sharing

2% Disabled

WHO ARE THE BORROWERS? SLIDE 2 OF 3:

Savings 47% of Borrowers save actively

84% Fixed monthly payment; 12% When they can

R625 p/m 57% use Bank for savings; 24% Stokvel

WHO ARE THE BORROWERS? SLIDE 3 OF 3:

Community Leader

Employer

Builder Material Supplier

Unregistered Money lender

Family/ Friends

Micro lender

Store credit

The Bank

RHLF Lender

0% 20% 40% 60% 80% 100%

1%

2%

2%

9%

13%

15%

17%

29%

100%

Lending History

LOAN DESCRIPTION

LOAN DESCRIPTION Loan Size:

R7,971 Requirements:

Mostly ID Book, Payslip, Bank Statements

LOAN OUTCOME

LOAN OUTCOME

Medical Costs

Business

Bought or Repair Vehicle

Bought Food Persihables

Bought Furniture Appliances

Family Event

Settled Debt

Education

Home improvement

0% 10% 20% 30% 40% 50%

0%

1%

4%

5%

6%

7%

13%

17%

47%

Loan Outcome

LOAN OUTCOME: IF HOME IMPROVEMENTS...

To access sewerage for TOILETS

To pay labourer, house planner

To buy LAND

To buy a Site, Stand

To access WATER

Put SECURITY gates burglar bars

To access ELECTRICITY

Put in DOORS

To PAINT my house

Fixing ROOF/CEILING

Fixing /improving FLOORS/WALLS

To BUILD

Buy building materials

0% 2% 4% 6% 8% 10% 12% 14%

0.11%0.26%0.47%0.56%

1.19%1.24%1.31%1.55%

2.90%5.78%

8.01%10.80%

12.93%

If Home Improvements (47%), what?

LOAN OUTCOME: IF BUILT (10%)

Hut, Rondavel, Shack

Built an separate Room Flat

Boundary Wall

Roof, plastering, paving

Finish building a half built house

0% 5% 10% 15% 20% 25%

3%

3%

6%

8%

9%

14%

16%

17%

24%

If Built: What did you built?

LOAN OUTCOME: IF BUILT...

Built on average 36m² At a cost of R744 per m² 12% self built, friends, family (39 days labour) 44% stock piled materials in preparation of

building 10% build in sections when they had money

available 88% started building after 1 month of getting

loan 58% used additional money (on top of loan) to

build (Mean: R17,605 Median: R7,000 from OWN

SAVINGS)

WHAT IMPACT DID THE LOAN HAVE ON BORROWERS?

LOAN IMPACT1: LIFE IS BETTERSLIDE 1 OF 7

Self reported impact:91.6% said loan made life better

LOAN IMPACT 2: SELF ESTEEM SLIDE 2 OF 7

Decrease in Concerns and worrisome thoughts

Increase in ability to sleep well at night

Increase in Respect Community shows you

Increase in Respect other people in hh show you

Sense of self / feeling good about who you are

Respect you have for yourself

0% 50% 100%

49.20%

60.40%

61.50%

78.70%

85.30%

86.20%

Positive Impact on Self Esteem

LOAN IMPACT 3: QUALITY OF LIFE SLIDE 3 OF 7

Sense of space – not overcrowded

Ability to provide a well lit home

The convenience of preparing meals/ coooking

Ability to warm your house

22% 24% 26% 28% 30%

25.30%

27.00%

27.90%

28.50%

Positive increase in Quality of Life

LOAN IMPACT 4: SECURITY OF TENURESLIDE 4 OF 7

Positive impact on Security of Tenure20.6% reported INCREASE in sense of

security –

(A sense that you will NOT easily loose your home)

LOAN IMPACT 5: EDUCATIONSLIDE 5 OF 7

Number of children that attend school

Positive feedback you receive from the school/ teachers

Your children’s school marks/ performance at school

0% 10% 20% 30%

16.50%

20.10%

21.50%

Positive impact on Schooling

LOAN IMPACT 6: REPEAT LOANSSLIDE 6 OF 7

Repeat Loans:24% took more than 1 loan from Lender

Intention to take Repeat Loans: 82% intend to use Lender again

LOAN IMPACT 7: FINANCIALLY INCLUSIVE FOR LOW INCOME GROUPSSLIDE 7 OF 7

Refusals

Less than R3,500

R3,501 to R7,500

More than R7,500

0% 20% 40% 60%

6.50%

30.60%

30.10%

32.90%

3.00%

26.00%

28.30%

42.80%

Borrower Income groups

Household incomeIndividual Income

WHAT IMPACTS ON LOAN OUTCOME?

WHAT IMPACTS ON LOAN OUTCOME?

Gender Home Improvements more likely if Female (57%)

than when Male (37%) Income

Home Improvements more likely if smaller income <R3,500 (I: 69% HH: 69%) R3,500 to R7,500 (I: 39% HH:45%) >R,7,500 (I: 39% HH 39%)

Tenure: Home Improvements more likely if: OWN (47%/ 37%) Tribal Land (89%) than: RENT (11.2%)

THE BORROWING EXPERIENCE

THE BORROWING EXPERIENCE: FINDING OUT ABOUT THE LENDERSLIDE 1 OF 3

Other

Building Supplier

Co-worker /colleague

My employer

Lender's brochure /poster

Pamphlet /Newspaper

An agent from the Lender

Relative friend

0% 5% 10% 15% 20% 25% 30%

3%

7%

8%

9%

11%

12%

24%

28%

How did you find out about the Lender?

THE BORROWING EXPERIENCEREASON FOR USING THIS LENDERSLIDE 2 OF 3

Easy accessible

Building Supplier offered Lender's Loan

Reasonable Reapayment Period

Quick/ Good Turnaround time

Various Other Reasons

Lender's good Reputation

Good Interest Rate

Only Lender willing to borrow

0% 20% 40% 60%

0.9%

1.2%

6.4%

8.0%

8.6%

13.6%

19.7%

41.6%

Reason for using this Lender?

THE BORROWING EXPERIENCE:OVERALL PROCEDURESLIDE 3 OF 3

92% - Easy to obtain loan Mostly helped by Lender to apply 89% will recommend Lender

CONSUMER EDUCATION

CONSUMER EDUCATION 56% received consumer education (mostly from

Lending Institution) 86% received Loan Agreement 85% received explanation on Loan Agreement 78% had opportunity to ask questions prior to

signing it

CONSUMER EDUCATION

The Costs of the Loan

The Loan Agreement

The Repayments

The Loan Period

The Application Process

78% 80% 82% 84% 86% 88%

81.60%

83.60%

87.00%

87.20%

87.30%

% of Respondents who reported a good understanding of the follow-

ing aspects of the loan

CHALLENGES IN THE RESEARCH Inaccurate contact details for Borrowers:

Provinces being recorded incorrectly on the address lists provided by Lenders

Contact address not where investment was made Contact address not where borrower lives most of the

time Borrower suspicion about the nature of the

interview Family unaware of borrower’s loan – borrower

wants to keep it a secret Time and money spent on home visits, while loan

was not used for housing More support needed from Lenders – borrowers

phoning the Lender and not get confirmation that the research is legitimate

CONCLUSIONS

Impact Measurement challenging Borrowing Experience positive HOUSING Loan Outcome can be improved Gender, Income, Tenure impacts on Loan

Outcome Loan Impact:

Overall made life better Self worth Quality of Life Education Security of Tenure Impact on poor (<R3,500) Repeat Business

REGULAR PORTFOLIO IMPACT REPORTING (M MAILA)

36

DEVELOPMENTAL IMPACT      

Development impact statistics compiled from Mar-10

monthly Housing Impact Monitoring Reports  Number of new loans 33112    Loan usage   New House 3% Extension 8% Improvement 71% Services 2%  84% Others (mainly education) 16%  100% Repeat loan borrowers 29%

Borrowers using loan together with government subsidy 32% Gender of borrower   Male 41% Female 59% Borrower's employment   Private sector 30% Public sector 68% Self-employed, informal 2% Borrower's income   less than R1 500 45% R1 500-R2 500 9% R2 500-R3 500 8%R3 500 - R6 000 17% R6 001-R9 500 21%