Financial Exclusion in South African Mortgage Provision
Makha Baloyi, Lauren Fray, Janine Rutsch as Finclusive
"Over 7 million South African (SA) households are financially excluded from the mortgage system as they are not poor enough to receive government-subsidised housing, but too poor to qualify for a mortgage. We refer to these households as the ‘missing middle’. Households emerging from poverty are precluded from accessing homeownership as a first step to wealth accumulation, or necessary social infrastructure that leads to a myriad of socioeconomic benefits, such as higher levels of education and healthcare. Since the 2008 financial crisis, the mortgage market has shrunk while the missing middle has grown quickly. High rates of urbanisation and unemployment and a lack of economic stability have inflated the mismatch between the supply of housing and associated finance with its demand. The missing middle lacks power to influence the entrenched mortgage system and is particularly vulnerable to the negative impacts of financial exclusion since the financial shock of COVID-19. Fortunately, government support is available as access to affordable housing is considered a constitutional right, and supporting the emerging middle class is essential to economic development." You can read the team's written summary and access their systems map below!