MAIN IMAGE: Thabo Molefe, CEO of Touch Mansions
Thabo Molefe, well known as hip hop DJ, and entrepreneur Tbo Touch, recently announced the launch of his new business venture – Touch Mansions. The estate agency has opened its doors in Gauteng, with plans to expand to other provinces, touting its reason d’être as empowerment and empathy.
“We are thrilled to launch Touch Mansions and redefine the real estate landscape by placing inclusivity and empathy at the forefront…We are here to create solutions as we represent that household that gets declined for their first home application. Nothing beats being told ‘you have been approved’, but you can only get there with a real estate agency that understands your core needs,” says Molefe.
He explains that Touch Mansions is committed to not just being a buy-and-sell company, but that their primary goal is to provide opportunities in education and access to land and property for previously disadvantaged people.
How can this be done? Molefe’s argument is that due to COVID (and a looming recession), many people have had to rely on multiple streams of income. Simply sourcing customer information from traditional credit institutions offers a limited view of what the customer has to offer.
A new way of looking at credit?
“Our goal is to provide a non-linear approach to credit applications that takes this into account. Borrowing rules are not in favour of many of our customers. We believe that banks are also aware that a lot of people don’t have access to the same collateral that the privileged few have always enjoyed. This doesn’t mean we should apply the same criteria to everyone. Unfortunately, the landscape has never been equal when it comes to capital acquisition or facility acquisition from banks. Banks traditionally used benchmarks to qualify individuals for loans have historically favoured certain groups. Therefore, we consider all these variables when presenting arguments to the bank, without necessarily producing additional traditional paperwork”, he says.
An overlooked buyer pool
Inclusivity ties back to revisiting borrowing policies. The evolving landscape includes entrepreneurs in informal business sectors. Today, these sectors contribute significantly to employment and provide access to disposable income for customers who are considered un-bankable by definition. However, it might surprise you that they can afford an R20 million house in cash. Our definition of a mansion can vary, ranging from a 40 million Rand property to a 1-bedroom starter apartment and everything in between. Touch Mansions aims to offer the same bespoke, quality service to anyone looking to enter the residential property market.
Winning over a conservative banking system
South African banks have a well-earned reputation for erring on the side of conservatism, with very strict lending criteria. While this is a good thing in many ways, it is unarguable that many people are excluded from traditional lending practices, especially the self-employed. Could Touch Mansions win over the banks with their approach? It remains to be seen, but the fact is that thousands of South Africans are currently excluded from entering the property market – something needs to change.