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Township title deeds: Potential blocked

Innovative financing solutions needed

Mentioned in this Article

FM Edition:

The article by Stephen Timm on township title deeds headlined "Potential blocked" refers.

Timm refers to the Free Market Foundation’s Khaya Lam Land Reform Project, which aims to bring about a true end to land discrimination by assisting the transfer of title deeds to tenants currently occupying municipal-owned land and houses under apartheid-era regulations.

Timm highlights the plight of Maplatjie Ramokhoase, who built 11 rooms for cash that she now lets to tenants. She applied to three banks for a loan to add a laundry and spaza shop. She was refused and told "we do not lend on titles".

What the banks did not tell her is that she was refused because she could not show an income stream — that is, an ability to repay. When we explained this to her, she understood, and is now talking to banks to establish what they require. The important point is that the bank staff did not have the necessary training to advise her on how to overcome this problem.

The Free Market Foundation facilitates the issuing of titles. Unfortunately, we do not have the resources to educate title-deed holders in how to leverage their asset, as Timm points out.

With the national impetus to give people title deeds, surely this is an opportunity for banks to develop a model whereby this formerly "dead" capital can be unlocked and to assist new owners to understand financing requirements that are new to them?

Perry Feldman
Free Market Foundation Khaya Lam Land Reform project manager