Public servants who are in the gap market are expected to start streaming through the doors of the new Human Settlements Development Bank in October to seek mortgages.
The gap market comprises people who earn too much to get RDP houses, but too little to qualify for mortgages at the banks.
The bank's chief executive, Samson Moraba, says the bank is setting up processes and mechanisms to get it up and running by the set date.
Moraba said they wanted to help as many people as possible own their own homes.
He said that up to now many people, including three million people in the public sector, could not get help from commercial banks because they were averse to risk.
But the Human Settlements Development Bank would be able to assist this share of the market and provide the necessary home finance.
Moraba said the government employee scheme comprised 1.2 million people.
"If you include the rural market, because there are teachers and nurses in rural areas, it is between two million and three million," he said.
He said that once the bank became operational in October, it would seek to penetrate the market.
Branches would be opened in all provinces, he said.
The roll-out in the provinces would ensure the gap market was fully catered for.
He said other than people in cities and towns, there were many public servants in rural areas.
Moraba said they were also working with traditional commercial banks.
But their mandate was very clear that they needed to cater for people who were in the gap market.
He said the new bank would take the form of a development finance institution in the mould of the Development Bank of Southern Africa.
The bank would provide financial assistance to the whole value chain.
Moraba said that to ensure they fulfilled the government's transformation agenda they would have players who were not in the market taking part.
These would include black entrepreneurs who would participate in the market they had not been able to break into for years.
The new bank was formally launched in Cape Town on Friday.
Human Settlements Minister Lindiwe Sisulu said this was a breakthrough for many people in the gap market.
She said it had taken them a long time to launch the bank.
She added that they would ensure they got to the position where millions of public servants would be able to get the help they wanted.
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