The Trust for Urban Housing Finance (TUHF) Group of companies has announced the launch of TUHF21, a ‘separate but connected’ operation from the group.
The objective of TUHF21 is to rapidly explore other markets, particularly in townships while growing its existing product portfolio and developing innovative new ones. It will remain connected to the overreaching TUHF ethos of ensuring that access to finance for property entrepreneurs is optimised, urban regeneration, densification and management is scaled, and that training and mentorship of clients continues. TUHF21 will also manage all the Corporate Social Investments (CSI) activities which are an important focus of the group.
TUHF21 will focus on three pillars to harness fresh opportunities:
- Managing and growing its Intuthuko, uMaStandi, and other products.
- Developing new solutions based on relevant and practical research.
- Providing impact tracking and reporting services for the Group to ensure the development impact activities continue in a financially sound and highly governed manner.
“As a non-profit organisation, TUHF21 remains proudly not for loss. Financial sustainability will be at the core of our future operations. It will receive an injection of capital through the sale of a portion of our shares in TUHF Holdings and will continue to accrue dividend income from its remaining shareholding” says Lusanda Netshitenzhe, CEO at TUHF21.
“As a founding shareholder and incubator of the well-known TUHF Limited brand which operates in inner-cities and has a successful 18-year track record, TUHF21 now wants TUHF Limited to go into the world on its own and to free up TUHF21 to focus on its newer products. To this end, TUHF21 can now attract new stakeholders and grow its recently developed uMaStandi sub-brand in township markets, among other exciting products and programmes in its stable”.
This will see the uMaStandi core lending programme driving aggressive targets to reach profitability, and all other programmes will be managed on, at minimum, a cost-plus-margin basis. The research, development and innovation work will be performed in a focused manner with clear lines of funding to each result area to ensure that applied research becomes the driver of any new products that will be brought to market.
It comes down to making an inclusive impact and affecting real change to people’s lives. The inner-cities and townships are not easy markets. But it is in this challenging environment where TUHF21 wants to make the most impactful contributions.
“We want to be able to scale uMaStandi in markets where we see opportunity, and really focus on the development work needed in the country. TUHF Limited will still be assisting us with some of the infrastructure, technology, and policies we built up over the years to ensure that TUHF21 is able to leverage on this long track record,” adds Netshitenzhe.
With a philosophy of creating impact through collaboration and innovation, TUHF21 will build, develop, and incubate financial services solutions that serve urban development needs. And, while each TUHF company will have its own focus areas, they will be collaborating with TUHF21 to drive a more sustainable and resilient urban development agenda that goes beyond the traditional inner-city focus of the Group to include South Africa’s townships.
Urban renewal and management
In many respects, TUHF21 will be the ‘insider/outsider’ to TUHF Limited. It will optimise the urban renewal efforts of TUHF Limited and assist it better manage contributions to urban management, regeneration, and collaboration with communities and local government.
“It is about providing honest input on the regeneration efforts and identify ways to improve on our past efforts. The benefit is now that we are on the outside looking in, we can better see the gaps that exist and look to enhance and advance the work being done,” says Netshitenzhe.
The planned main product line of TUHF21, uMaStandi, will continue to target entrepreneurs and resident landlords who provide backyard accommodation in the townships. It uses the property as equity to fund a rental enterprise where the owner or entrepreneur gets the peace of mind that construction on the property – to increase its revenue potential – will be professionally designed and built according to the required planning permissions.
TUHF21 will seek to further grow and commercialise this innovative initiative that builds on the pillars of all TUHF funding initiatives, such as ensuring that the product is scalable and able to grow rapidly, and that the product is replicable so it can be launched in all major townships across the country, sustainably.
Another product TUHF21 will drive is the Intuthuko Equity Fund (IEF). Established in 2004, this is a unique inner-city property finance initiative supporting previously disadvantaged individuals who want to enter the property investment market but face equity and/or deposit constraints in accessing the finance required to do so.
Netshitenzhe states that the IEF uses individual TUHF Portfolio Managers to provide extensive handholding with the entrepreneurs it funds. “They are training them in the areas where they might lack sufficient knowledge. And if more specialised skills are required, Portfolio Managers match those needs with the relevant external training and mentorship stakeholders. It is all about giving the hands-on training necessary to empower IEF clients with the means to get the most value from their property investments.”
“The central mandate driving TUHF21 will be to incubate businesses through its subsidiary companies like uMaStandi and IEF, rather than having direct contact with entrepreneurs. Its main objective is to ensure that the financial solutions developed have business continuity and are sustainable while always looking for new and innovative ways to provide real development impact,” concludes Netshitenzhe.