It is estimated that 90% of those living in rural and township environments have or are building or rebuilding their houses using the incremental formula of ‘one brick at a time’, largely because they don’t have access to housing finance.
These builders have transformed some R2- to R3-million worth of real estate in the country, yet they struggle with systemic challenges in being able to secure their title deeds.
This is why Lance Chalwin-Milton (real estate professional in property development), GG Alcock (an informal settlement guru), and Senzo Tsabedze, chairman of Afrirent, have co-founded a groundbreaking property evaluation system called E-DEED.
Driven by Artificial Intelligence (AI) and block chain, E-DEED provides a 97% accurate evaluation and an associated non-fungible token (NFT), a crypto asset that accurately reflects a property’s value.
The end result is that thousands of “unbanked” homeowners with little chance of accessing title deeds for their properties will be catapulted into the formal economy and families’ legacy investments can at last be recognised.
Why title deeds remain a challenge for township and rural homeowners
Informal sector guru, GG Alcock, explains that the complexity of township home ownership, tribal land ownership and RDP homes means the chance of getting title deeds is extremely slim:
“The reality is that millions of homes will never get title deeds, especially in tribal and Ngonyama trust areas. Township and RDP homes have their own complexities related to historical and cultural issues. This is why, in the absence of a title deed, we need to find ways to help owners with no hope of title deeds to realise the value of the asset in which they have invested.”
Putting meaningful property ownership and wealth into the hands of all South Africans has long been on the entrepreneurial radar of Chalwin-Milton:
“We want to make the unwealthy, wealthy. When we say ‘unwealthy’, that is a misnomer. These assets can be worth R1 to R2-million or more. This is a 100% equity asset.
When we did our homework, we encountered an estimated 20 million homes in South Africa. Only 10% - two million of them – are classified as ‘shacks’. There are about nine million deeded homes and the remainder are the invisible but significant structures within townships or on tribal trust land in rural areas,” he says.
How property valuations could improve access to home insurance
Tsabedze believes that traditional property wealth processes have been marred by inefficiencies, paperwork, and lack of transparency.
E-DEED – which requires no more than a smart phone - will also enable the under and uninsured to cover their homes at their true values as the certificate creates insurable interest.
“We are heavily invested in driving innovation and inclusion within the property sector. E-DEED opens up opportunities for homeowners in townships and rural areas, enabling greater financial inclusion and wealth creation.
This platform provides a secure, efficient, and transparent solution, ensuring that homeowners are no longer excluded from the financial system,” he observes.
Currently just 11,54% of South Africa’s homes are insured.
Chalwin-Milton notes that insured mansions in Umhlanga were covered during the KZN floods whilst large family homes in Umlazi were completely lost:
“That is absolutely criminal. This is about creating value where there was no perception of value. Why should these families be denied the dignity of insurance when their brick and mortar is worth exactly the same as others. By creating the insurable interest – insurance will be available for the first time ever”.
Why financial inclusion could reshape the property sector
It will certainly be a game changer for the property and insurance industries, Alcock agrees:
“I think that this will fundamentally reshape our financial sector when it comes to asset finance and how we look at housing. The large portion of our population who have been left out have managed to do amazing things. There is a moral prerogative as well as a business opportunity in changing this.”
Plans to expand E-DEED across Africa
The overall aim is not only to show institutions how they can use E-DEED to access an untapped market, but to ultimately move beyond South Africa into at least six additional African geographies by the end of next year.
