By John Fraser
“You have probably never heard of Lehurutshe, a small village near Zeerust in the North West Province, which lies close to Botswana Border,” says Chris Hart, Executive Chair of Impact Investment Management.
“And that helps to explain the neglect, despair and misery of this and so many other small communities in South Africa.”
However, venture capitalist Hart and his team at Impact Empowerment Ventures are bringing new hope to the villagers of Lehurutshe, with a project to build a student accommodation block, using capital that would otherwise have disappeared onto the grasping hands of Treasury officials.
There will no shortage of demand from the students who are studying at the town’s Taletso TVET College.
“Generally, these students are currently being accommodated in the back rooms of noisy, crowded homes where it is not conducive to study properly,” says Hart, who has just returned from a site visit to Lehurutshe.
“There is limited accredited accommodation available for these students, and we are determined to help to fill this gap.
“Here we have a situation where there is tertiary education available, but on the accommodation side it is really sub-optimal to learning.”
Hart explains that jobs will be provided in the construction stage of the project, staff will be needed to run the student hostel once it is opened, and it will make a real and tangible difference to a neglected backwater.
“While this investment will help to create jobs, it will also provide business ownership for young unemployed people in this community,” he states.
“This investment is proof that there are plenty of opportunities and need in SA’s neglected rural outposts, and we are providing a facility that will be high-impact, but also highly rewarding for investors.
“There are hundreds of these opportunities scattered across South Africa. From an investment point of view, the rural student accommodation margins look better than those for hostels established near our urban universities.”
The project is to be financed through the Section 12J tax incentive, which allows people with a high tax burden to put their tax liability into an eligible investment instead of handing it over to the fiscus.
The project is projected to have a return on investment of 12-15%, net of costs.
“This is a scalable investment, and the size of the accommodation block will depend on the funds raised. We plan to house at least 40 to 50 students, but it could go higher,” Hart explains.
“And, of course, this model can be planted elsewhere in the country where there is similar demand.
“We could just say: why should we take any notice at all of this community, and similar neglected rural outposts? Instead we are asking: what can an investment do, how can we made a real difference, have a real impact?
“The plight of rural villages must be neglected no more.”
Chris Hart will be hosting a webinar on this student housing project on Friday, the 18th of June at 9.30.
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