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Johannesburg - In a groundbreaking move for low-income earners, banking group Absa, in conjunction with Negotiated Benefits Consultants (NBC), has introduced a R1bn provident-backed securitisation to provide home loans for more than 25 000 South Africans in the first issue of R500m.
The aim of the joint venture is to provide security for homeowners and financiers alike.
NBC Future Guard, the name given to the product, is unique in that home loans are secured by the homeowners' withdrawal benefits and not the house itself, which is the conventional approach.
NBC Future Guard will serve a market segment that does not meet the traditional criteria for home loans.
The product is affordable and accessible and provides the lower-income market with bargaining power, all critical factors of low-income lending.
Founded by its present chairperson
The loans can be used to buy, renovate or build a house in any area.
NBC is the first black-controlled and managed employee benefits organisation in South Africa and the leader in negotiated benefit funds. It was founded by its present chairperson and CEO, Max Maisela.
It advises on retirement savings of 350 000 active members in more than 160 funds.
Clients include parastatals, large industry-based retirement funds and retirement funds of South Africa's leading corporates.