One question that often comes up with buyers is whether banks in South Africa have BEE (Broad-Based Black Economic Empowerment) targets when it comes to granting home loans. The short answer is: yes, but not in the way many people think.

Transformation in the Banking Sector

Banks are measured against the Financial Sector Code (FSC), which forms part of the Broad-Based Black Economic Empowerment (B-BBEE) framework.

A key focus area of the FSC is Access to Financial Services, which looks at how banks are providing credit - including affordable housing finance - to historically disadvantaged South Africans.

Instead of strict quotas, banks are scored on how much they increase lending to black South Africans, particularly in the affordable housing and first-time buyer segments.

How This Affects Home Loans

This is why many banks run special products for first-time buyers and why they report carefully on how much lending is going into the affordable housing space (usually properties below a certain threshold, e.g. R1.2m).

It’s important to note:

•    All loans must still comply with the National Credit Act (NCA), which requires affordability testing; and
•    No loan can be granted or declined solely based on race.

Instead, banks are incentivised to extend credit more broadly to groups who were historically excluded from property ownership.

Why Is There a Race Checkbox on Bond Applications?

At Phoenix Bonds, we often get asked about the race question on application forms. Buyers sometimes feel uncomfortable or wonder if it affects their approval chances.

The answer:

•     This information is not used to decide whether you qualify for the loan; but
•     The bank requests it for reporting purposes, as part of their BEE scorecard obligations.

It helps banks demonstrate how they are improving access to credit for all South Africans - a requirement under the Financial Services Charter (FSC).

The Bottom Line

Yes, South African banks do have BEE-related targets around home loan approvals. But these are about tracking and improving access to finance, not about bypassing affordability rules. Your home loan approval still depends on one thing above all else: serviceability - your ability to comfortably repay the loan.

At Phoenix Bonds, we help buyers navigate the process, explain what the banks are really looking for, and submit your application to multiple lenders for the best possible outcome.

📞 Contact us today for a free prequalification and let’s start your home ownership journey.