South Africa's major financial institutions have finally agreed to release R42-billion they committed to government for the provision of houses to people in lower income brackets, SABC news reported.

The banks said they would make the money available in 2005 in a three-year agreement that was to last until 2008, but it was never released due to major differences with government.

The banks have held up the funds because they wanted government to take the risk in cases where owners defaulted on their bonds.

Government refused, insisting that banks should assume the risk of their business activities.

After protracted negotiations which started in 2005, Zola Skweyiya, the social development minister, says they have agreed with the banks that government will share the risks with them when they make an increased investment in low-cost housing after 2008.

Skweyiya says the banks have advised them that they have already disbursed about R17-billion of the total amount to the target market by September last year.

Sapa

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