Rand Merchant Bank (RMB) and INDLU have announced the launch of a R1 billion Blended Finance Programme, to formalise and scale South Africa’s burgeoning affordable rental market. INDLU is a South African property financial technology company that empowers landowners to build, manage, and earn from high-quality rental housing. The programme aims to bridge the national housing gap—currently estimated at 2.3 million units—by providing sustainable, affordable credit to micro-developers who have historically been excluded from traditional banking sectors due to a perceived lack of formal collateral.
Alessandro Scalco of RMB sustainable finance said:
“The Indlu Blended Finance Programme represents a blueprint for how South African capital markets can drive large-scale, powerful social impact without compromising financial performance. This programme attracts capital to critical development areas like financial inclusion and affordable housing, empowering entrepreneurs to develop their own communities.”
RMB acted as the structurer and one of the lenders for the programme, utilising blended finance to support affordable housing. A key component of this structure was the catalytic funding provided by the FirstRand Foundation (FRF) and FSD Africa Investments (FSDAi), with FRF providing a R30 million concessional loan commitment to establish the construction warehouse facility and FSDAi acting as the anchor funder of this facility. FSDAi has also committed funding as co-funder of the catalytic mezzanine tranche in the securitisation. In addition, to FRF commitment, FNB have committed a sizeable R400m for the long-term financing of the programme.
Anne-Marie Chidzero, Chief Investment Officer of FSDAi said:
“Low-income affordable rental housing is one of Africa’s most overlooked, and most bankable, real-economy markets. With INDLU, we are using catalytic capital to do what FSDAi was built to do: anchor a new asset class, prove it to institutional investors, and create a replicable pathway that can finance dignified housing well beyond South Africa’s borders.”
This programme expands access to affordable housing finance for small-scale, primarily black and women property owners. By addressing early-stage construction and tenanting risk, FSDAi and FRF’s catalytic funding unlocks private capital and ensures cost benefits are passed directly to developers and communities.
Cobus Truter, CEO of INDLU said:
“Our bold ambition is to fundamentally change the landscape of informal settlements. By turning each tile in the urban mosaic into formalised, dignified infrastructure, we are building better African cities from the ground up. “The R1 billion deployment is expected to have a profound multiplier effect on the economy through significant job creation and social upliftment.”
To date, the model has already delivered over 2 200 high-quality rental units in areas such as Tembisa, Mamelodi, and Cosmo City, proving the commercial viability of the “backyard” real estate sector. While INDLU has successfully facilitated approximately R311 million in financing to date, the new platform is designed to meet a massive surge in demand.
INDLU has identified an immediate project pipeline exceeding R915 million over the next 12 to 24 months, with a specific goal to raise R500 million for property entrepreneurs within the first year. The model has already supported over 1 000 short-term construction jobs and nearly 400 permanent roles through local SMEs. Furthermore, it serves as a powerful tool for gender equity, with 64% of INDLU’s current landowners being female. “By ensuring every unit is integrated into formal municipal infrastructure—including water, electricity, and sanitation—the programme significantly improves urban living standards and safety,” Truter added.
INDLU provides landowners with microfinance loans for construction, managed through a “closed-loop” digital ecosystem where the Indlu software application automates rental collection and loan servicing. This ensures transparency for investors and steady income for property owners.
