The South African government would spend R16-billion on building new houses and human settlements for the poor in the next financial year, Human Settlements Minister Tokyo Sexwale said on Wednesday.

He explained in his budget vote speech that the bulk of the funding would go to the provision of housing subsidies to the bottom-most end of the market - "the poorest of the poor" - who earned between R0 and R3 500 a month.

"A large percentage of this is allocated to provinces in the form of housing development grants," said Sexwale.

The Minister pointed out that there were currently 8 000 human settlements projects under way across the country, and that 219 000 housing units had been built by government in the last financial year.

Nevertheless, the housing backlog currently stood at about 2,1-million units, which accounted for about 12-million South Africans that were still in need of better shelter.

Meanwhile, Sexwale met with the financial sector earlier in the week to discuss ways of increasing funding to the low-cost and affordable housing markets, which could increase the number of houses built by government and private sector.

Sexwale said that following the meeting, the department and financial institutions agreed to form a joint working team to look into the different aspects of housing finance, notably how to generate innovative ideas around the R1-billion government guarantee fund that was being set up to assist the "gap market".

"Those who stand to benefit from such a financial platform include nurses, teachers, police, prison warders, government officials, certain categories of management, and blue collar factory and office workers."

However, Sexwale emphasised to the institutions that financial prudency should remain paramount. "In no way can there be recklessness in lending practices which may lead to flippant calls upon the guarantee fund."

He also advised potential beneficiaries of the fund to "exercise responsibility" by adhering to the terms and conditions of their credit agreements.

Further, Sexwale pointed out that he had raised concerns with the financial institutions over their compliance with the Home Loans and Mortgage Disclosure Act, which required banks to report on their lending patterns.

"The Ministry will play an activist role in monitoring this activity by the banks, in the interests of regulating the homeowners' property market, while being alive to the complexity and sensitivity of the operations of financial institutions," said Sexwale.

CORRUPTION

Meanwhile, the Minister reported that the special investigation unit established in November to probe abuse of the Low Income Housing Subsidy scheme, had almost completed its investigation.

Some 1 570 officials had been arrested to date, of whom 1 189 had been convicted, and R38-million had been recovered.

"This process has also seen five lawyers struck off the roll - and more is to follow," Sexwale said.