African Union for Housing Finance: Analysis of Ekurhuleni Household Surveys

EXISTING SYSTEMS FOR FINANCE:

INFORMAL SETTLEMENT / Total
John Dube / Bapsfontein / Payneville (Gugulethu/Everest) / Count / Column %
Count / Column % / Count / Column % / Count / Column %
Q25. How is the household saving money? / Stokvel/ gooi-gooi, etc. / 6 / 2.5 / 16 / 3.0 / 29 / 2.8 / 51 / 2.8
Post Office, SACCO (savings account, savings book, etc.) / 39 / 16.2 / 39 / 7.4 / 130 / 12.6 / 208 / 11.5
Bank (savings account/fixed deposit, etc.) / 188 / 78.0 / 419 / 79.1 / 797 / 77.2 / 1404 / 77.9
Other (keeping in house, etc.) / 10 / 4.1 / 57 / 10.8 / 92 / 8.9 / 159 / 8.8
Not answered / 1 / .2 / 2 / .2 / 3 / .2
Total / 241 / 100.0 / 530 / 100.0 / 1032 / 100.0 / 1803 / 100.0

Bank Saving Accounts

30. 8 percent of all the households interviewed (from all three informal settlements) save money regularly. Of the 30.8 percent that save regularly, 77.9 percent of the households save their money with banks. Besides having a saving account 2.8 percent of the households have a Current/ Cheque account.

An “Mzansi” account is South Africa's low-cost national bank account. Mzansi was launched in 2004 and extends banking to low-income earners and those living beyond the reach of banking services. South Africa's four major retail banks (Absa, First National Bank, Nedbank and Standard Bank) as well as Postbank offer the Mzansi account. Mzansi is an initiative by the country's banks to put full-service banking within at most 15 kilometres of all South Africans, and an automatic teller machine (ATM) within at most 10km of their homes.

The Mzansi account is a basic, standardized, debit card-based transactional and savings account. All that is required to open the account is a valid ID document. To keep costs as low as possible and to ensure that the account is easy to use, transactions are limited to deposits, withdrawals and debit card payments (the account includes a debit card that can be used at retail outlets).

Transfers are one the most basic financial intermediary needs in South Africa, where there is a historical flow of money from urban to rural areas. Mzansi Money Transfer provides a means of sending money anywhere in the country, to and from over 5 000 bank and Post Office outlets. Transfers are limited to a maximum of R5 000 per day, and users not need to have a bank account.[1]

Besides having a savings account 20.2 percent of the households interviewed also have an Mzansi bank account, however, such accounts do not provide access to credit.

Post Office/ SACCO

Of all the households interviewed 11.5 percent save their money with the post office or through SACCO (Savings and Credit Co-operative). There is no difference between a credit union and a SACCO. The members of a SACCO agree to save their money together in the SACCO and to make loans to each other at reasonable rates of interest. Interest is charged on loans, to cover the interest cost on savings and the cost of administration. There is no payment or profit to outside interest or internal owners. The members are the owners and the members decide how their money will be used for the benefit of each other.[2]

Stokvels/Gooi-gooi

The interviews conducted showed that 8.8 percent of households save their money in their houses and 2.8 percent participate in stokvels/gooi-gooi’s (rotating savings and credit associations). It would be interesting to know whether this low level of participation is due to a lack of awareness or previous participants dissatisfaction.

GENERAL FINDINGS:

Ekurhuleni Municipality, South Africa.

The general findings in South Africa are presented by the three informal settlements covered under the household survey.

JOHN DUBE

Demographics and Socio-Economics

Population

The household roster carried out in 2007 shows a total of 3253 people residing in the settlement. The population size of the John Dube settlement is the smallest of the three settlements surveyed. 52.5 percent of the residents have been living in the settlement for more than 7 years. 98.6 percent of the residents are South African citizens. From the survey carried out in 2007, 1077 households were identified. 24.5 percent of the households consist of only one member and 66 percent of the households have three or fewer household members. The average amount of members per household is 3.

Age and Gender

The split between the male and female population is more or less even, with 51.6 percent of the population is male and 48.4 percent is female. The population less than 19 years of age is 39.5 percent, the working age group (between 20 and 55 years) is 54 percent and the senior citizens (older than 55 years) constitute 5 percent of the population. The mean age in the settlement is 24.34 years and the median is 23 years of age.

Employment

27 percent of the residents have some form of employment of which 14.5 percent are employed full time (either in the formal of informal sector), 2.4 percent are self-employed and 10.1 percent have part time employment. Of the 73 percent of the residents who are unemployed 6.4 percent have been unemployed for less than 6 months in the past year, 19.6 percent have been unemployed for more than 6 months in the past year and 41 percent are students.

Income

63 percent of the households interviewed reported a wage income. The mean wage was R3258.38, the median R1374.00. 5.2 percent of the households reported receiving non-wage income from their own business/self employment, for which the mean amount was R847.12, the median was R500.00. 46.7 percent of households receive old age, disability or child support grants. The mean of old age/ disability grants is R846.78, the median R820.00. The mean of child support grants was R317.57, the mode R300.00.

Savings

Only 22.4 percent of the households are regularly saving money. Of the 22.4 percent that are regularly saving 78 percent of the households keep their savings in a bank, 16.2 percent keep their savings in a SACCO or Post office, 2.5 percent are involved with a stokvel/gooi-gooi, and 4.1 percent keep their savings in the house. Only 5.1 percent of the households are saving money towards their own housing. The mean amount of this saving is R907.45 and the median is R250.

Physical Infrastructure

Housing Conditions

25.1 percent of the houses had only one room. 40.9 percent of the houses had 2 rooms in total. 87.4 percent of the houses had three or less rooms. 72 percent of the households interviewed use only one room for sleeping (note: the average number of members per households is 3). 28.8 percent of the houses do not have a separate room used as a kitchen. 99.5 percent of the houses do not have a separate room used as a bathroom.

Electricity

In general electricity is not used as a main source of energy. 91.8 percent of households use candles for lighting, while 1.9 percent use electricity for lighting. 85 percent of households use paraffin for cooking, while 1 percent use electricity. 66.5 percent of households use coal/charcoal for heating, while 0.1 percent use electricity. The main question here is whether this lack of use of electricity as a source of energy is due to lack of access or expense of electricity.

Insight into the Residents

Housing Preferences

96.9 percent of the households interviewed expressed a preference to live in Ekurhuleni even if offered the option to live anywhere else. 49.2 percent of the households would prefer to receive housing in the settlement area they are currently in, while 19.3 percent had no preference on the location (they were prepared to move wherever housing may be provided). 93.9 percent of the households would prefer to own the housing than rent it. Of those who would prefer to own the housing 54.5 percent would want to have the house built for them, 27.1 percent would want to be responsible for building their own houses with financial assistance and 18.4 percent would want to be actively involved in the construction of the house. With regards to a toilet 57.8 percent of the households would prefer the toilet to be built as part of the house, while 42.2 percent would prefer a freestanding toilet in the yard.

Household expenses

INFORMAL SETTLEMENT / Q23b1. What is the average cost per month of Electricity? / Q23b2. What is the average cost per month of Paraffin / Q23b3. What is the average cost per month of Gas / Q23b4. What is the average cost per month of Wood / Q23b5. What is the average cost per month of Coal/Charcoal / Q23b6. What is the average cost per month of Candles
John Dube / Mean / 97.79 / 87.07 / 120.78 / 62.46 / 98.92 / 25.64
Median / 100.00 / 90.00 / 120.00 / 40.00 / 80.00 / 20.00
N / 24 / 952 / 9 / 28 / 743 / 990

The mean of the total monthly expenses on energy was R492.66, the median was

R450.00. An important question is what the cost of providing the equivalent amount of electricity would be. Another consideration would be how to cover the expense of the installment of the infrastructure needed to provide access to electricity (upfront payment, subsidization, or bury the cost in each monthly bill). A further consideration is whether electricity should be billed on demand; if a pay as you go system would be more suitable; or a prepaid monthly amount with an option to top up.

Use of Housing

98.2 percent of the households would not increase their monthly income by renting out part of their house, if they were allocated one. 89.8 percent of the households would not increase their monthly income by building extensions for renting on to a house, if they were allocated one.46.2 percent of the households interviewed perceived the cost to rent a room as being R500.00, none of the households interviewed perceived the rent of one room to be higher than R500.00. 83.6 percent of the households would not be willing to use their home (if they owned it) to raise financing for their business. The main reason for this is the fear of losing the family home.

Skills and Education

Of the 2781 residents surveyed in the household roster 12.8 percent have no formal education. 17.9 percent have completed Grade 7 (Standard 5) and 8.3 percent have completed Grade 12 (Matric). 1 percent have completed a post Matric qualification. From a sample of 1756 residents in the John Dube informal settlement 1310 (74.6 percent) have never received training or skills development. 9.9 percent have received training in labour and 4.4 percent have received training in machinery operation and driving. Skills development was received by 14.5 percent through on the job/ in the workplace training. 8.3 percent received training through studying courses and 1.6 percent received skills through studying courses and on the job training (while the remainder have not received any training).

HIV/Aids

95.7 percent of the households do not have any orphans in the household. 85.2 percent of the households do not have any adults suffering from long term or chronic illness. 96.15 percent of households did not report having a child or adult die of long term of chronic illness in the last 12 months. These numbers taken together reflect a low rate of HIV/Aids infection in the settlements.

BAPSFONTEIN

Demographics and Socio-Economics

Population

The household roster carried out in 2007 shows a total of 4613 people residing in the settlement. 40.2 percent of the residents have been living in the settlement for more than 7 years. 80.4 percent of the residents are South African citizens. From the survey carried out in 2007, 1750 households were identified. 28.7 percent of the households consist of only one member and 76.3 percent of the households have three or fewer household members. The average number of members per household is 2.6.

Age and Gender

53.3 percent of the population is male and 46.7 percent is female. The population less than 19 years of age is 29 percent, the working age group (between 20 and 55 years) is 65.8 percent and the senior citizens (older than 55 years) constitute 3.8 percent of the population. The mean age in the settlement is 25.78 years and the median is 26 years of age.

Employment

47.2 percent of the residents have some form of employment of which 32.8 percent are employed full time (either in the formal of informal sector), 2.4 percent are self-employed and 12 percent have part time employment. Of the 52.8 percent of the residents who are unemployed 7.9 percent have been unemployed for less than 6 months in the past year, 10.1 percent have been unemployed for more than 6 months in the past year and 29.6 percent are students.

Income

87 percent of the households interviewed reported a wage income. The mean wage was R1625.95, the median R1400.00. 5 percent of the households reported receiving non-wage income from their own business/self employment, for which the mean amount was R1322.05, the median was R1000.00. 21.14 percent of households receive old age, disability or child support grants. The mean of old age/ disability grants is R875.40, the median R820.00. The mean of child support grants was R286.03, the mode R190.00.

Savings

Only 30.3 percent of the households are regularly saving money. Of the 30.3 percent that are regularly saving 79.1 percent of the households keep their savings in a bank, 7.4 percent keep their savings in a SACCO or Post office, 3 percent are involved with a stokvel/gooi-gooi, and 10.8 percent keep their savings in the house. Only 13 percent of the households are saving money towards their own housing. The mean amount of this saving is R512 and the median is R300.

Physical Infrastructure

Housing Conditions

53.5 percent of the houses had only one room. 26.2 percent of the houses had 2 rooms in total. 91.9 percent of the houses had three or less rooms. 81 percent of the households interviewed use only one room for sleeping (note: the average number of members per households is 2.6). 60.3 percent of the houses do not have a separate room used as a kitchen. 98.6 percent of the houses do not have a separate room used as a bathroom.

Electricity

In general electricity is not used as a main source of energy. 84.5 percent of households use candles for lighting, while 0.9 percent use electricity for lighting. 92.9 percent of households use paraffin for cooking, while 0.6 percent use electricity. 35.7 percent of households use coal/charcoal for heating, while 0.5 percent use electricity. The main question here is whether this lack of use of electricity as a source of energy is due to lack of access or expense of electricity.

Insight into the Residents

Housing Preferences

83.7 percent of the households interviewed expressed a prefference to live in Ekurhuleni even if offered the option to live anywhere else. 45.7 percent of the households they would prefer to receive housing in the settlement area they are currently in, while 10.7 percent said they had no preference on the location (they were prepared to move wherever housing may be provided). 99.5 percent of the households would prefer to own the housing than rent it. Of those who would prefer to own the housing 43.1 percent would want to have the house built for them, 41.6 percent would want to be responsible for building their own houses with financial assistance and 15.3 percent would want to be actively involved in the construction of the house. With regards to a toilet 61.6 percent of the households would prefer the toilet to be built as part of the house, while 38.4 percent would prefer a freestanding toilet in the yard.

Household expenses

INFORMAL SETTLEMENT / Q23b1. What is the average cost per month of Electricity / Q23b2. What is the average cost per month of Paraffin / Q23b3. What is the average cost per month of Gas / Q23b4. What is the average cost per month of Wood / Q23b5. What is the average cost per month of Coal/Charcoal / Q23b6. What is the average cost per month of Candles
Bapsfontein / Mean / 181.20 / 109.12 / 152.31 / 66.38 / 54.17 / 24.22
Median / 120.00 / 100.00 / 150.00 / 50.00 / 48.00 / 20.00
N / 20 / 1663 / 13 / 124 / 634 / 1479

The mean of the total monthly expenses on energy was R587.40, the median was R488.00. An important question is what the cost of providing the equivalent amount of electricity would be. Another consideration would be how to cover the expense of the installment of the infrastructure needed to provide access to electricity (upfront payment, subsidization or bury the cost in each monthly bill). A further consideration is whether electricity should be billed on demand; if a pay as you go system would be more suitable; or a prepaid monthly amount with an option to top up.

Use of Housing

95.5 percent of the households would not increase their monthly income by renting out part of their house, if they were allocated one. 89.3 percent of the households would not increase their monthly income by building extensions for renting on to a house, if they were allocated one.28.3 percent of the households interviewed perceived the cost to rent a room as being R200.00,. 82.9 percent of the households would not be willing to use their home (if they owned it) to raise financing for their business for fear of losing the family home.

Skills and Education

Of the 4056 residents surveyed in the household roster 16.8 percent have no formal education. 19.1 percent have completed Grade 7 (Standard 5) and 8.8 percent have completed Grade 12 (Matric). 1.1 percent have completed a post Matric qualification. From a sample of 3130 residents in the Bapsfontein informal settlement 2084 (66.6 percent) have never received training or skills development. 15.7 percent have received training in labour and 6.3 percent have received training in machinery operation and driving. Skills development was received by 26 percent through on the job/ in the workplace training. 5.3 percent received training through studying courses and 1.4 percent received skills through studying courses and on the job training (while the remainder have not received any training).

HIV/Aids

97.7 percent of the households do not have any orphans in the household. 91.4 percent of the households do not have any adults suffering from long term or chronic illness. 98.6 percent of households did not report having a child or adult die of long term of chronic illness in the last 12 months. These numbers taken together reflect a low rate of HIV/Aids infection in the settlements.

PAYNEVILLE (GUGLETHU / EVEREST)

Demographics and Socio-Economics

Population

The household roster carried out in 2007 shows a total of 9072 people residing in the settlement. The population size of the Payneville settlement is the largest of the three settlements surveyed. 62.6 percent of the residents have been living in the settlement for more than 7 years. 92.8 percent of the residents are South African citizens. From the survey carried out in 2007, 3035 households were identified. 21.3 percent of the households consist of only one member and 68.1 percent of the households have three or fewer household members. The average number of members per household is 2.98.