Story audio is generated using AI
South Africa’s housing finance market has a vast blind spot. In townships and rural villages, families are building rooms, extending kitchens, adding rental units, erecting boundary walls and installing solar panels. These homes are shelter, but they are also stores of value, places of work and sources of income. Much of this investment, however, remains invisible to the formal financial system.The problem is not that these properties lack economic value. It is that many lack the form of proof on which conventional housing finance depends. Families may occupy homes on customary or communal land, live in state-subsidised properties without transferred title deeds, or inherit and purchase homes through arrangements that never reach the deeds registry. Ownership can be recognised locally and still be difficult for a bank to verify legally.Government has acknowledged a backlog of more than one million title deeds for subsidised homes. Beyond that are many properties held through tenure systems that do not fit the standard mortgage model. The result is an informal housing economy hiding in plain sight: homes are built, improved, occupied, rented and sometimes sold, but cannot readily support appropriately priced credit.A mortgage normally requires registered title, a valuation and an enforceable claim over the property. When one element is absent, the asset can disappear from the lender’s view. A household that may be steadily investing in a home is then left to finance construction through savings, stokvels or unsecured loans carrying far higher interest rates.This exclusion has a distinctly female face. Statistics South Africa estimates that, of more than 20-million households, about 43% are headed by women. That amounts to roughly 8.6-million women-headed households. Formalisation must first offer security, affordability and access; otherwise, it will be experienced as another administrative burden.They’re not all single-parent households and they are not uniformly poor. Yet women frequently carry responsibility for children and extended families while managing income assembled from salaries, side businesses, grants, trading and remittances.For these households, the absence of recognised property rights has consequences beyond access to a home loan. It limits the ability to improve an asset affordably, create rental income, fund a small enterprise or transfer wealth securely to the next generation. A woman may have paid for and maintained a home for years while remaining unable to use its value to obtain reasonably priced finance.We intend to test a different approach. Standard Bank is working with several fintechs to explore reliable ways of identifying untitled properties and confirming who holds the underlying rights. If the property, the person and the purpose of borrowing can be verified, the loan may be assessed as purpose-led finance rather than treated as conventional unsecured credit. The objective is not to pretend that title does not matter or to weaken prudent lending standards. It is to develop better evidence of ownership, affordability and intended use so that risk can be assessed more accurately and finance priced more fairly.Transaction histories, verified cash flows, digital payments, utility behaviour and community-based evidence can help build a fuller picture. Artificial intelligence (AI) can help make fragmented information more accessible at scale, but it must be explainable, monitored for bias and governed by consent. Technology is useful only when it helps solve the human problem: recognising reliable behaviour that traditional, patriarchal documentation misses.This housing challenge reflects a wider economic mismatch. Research from the University of Cape Town’s development policy research unit estimates that about 7.5-million people participate in South Africa’s informal economy, compared with 9.8-million in the formal economy. Toni Anderson, head of Standard Bank Home Services, said: “The future of housing finance lies not only in funding homes that exist on paper, but in enabling the millions of housing journeys already underway across our communities. Informal housing finance is an opportunity to drive inclusion, unlock value, and help more South Africans build wealth through better homes.”Government remains essential to the solution. Faster title transfers, credible ways of recording rights on communal land, interoperable identity and payment systems, and proportionate regulation would reduce risk for households and lenders. Formalisation must first offer security, affordability and access; otherwise, it will be experienced as another administrative burden.South Africa does not need to invent the value contained in these homes. Families, many of them led by women, have created it already. The task is to make that value visible and financeable without stripping away the social arrangements that sustain it. Doing so would turn informal housing from a symbol of exclusion into a platform for investment, enterprise and intergenerational wealth. It is too large to ignore.Montjane is chief executive for personal and private banking at Standard Bank
