A startup founded by a former head of the credit department at Capitec is creating digital records of residential properties that fall outside South Africa's title deed system. The company believes that banks, insurance companies, and credit bureaus are interested in information about the people living in these homes.
The DigiDeeds application was launched in March and has already attracted over 6,600 participants in areas such as Soweto, Hyelitsha, and Sochangwe. Community members receive a free 'DigiDeed'—a digital certificate that serves as proof of residence, and for owners, it records ownership of the structure, but not the land beneath it.
Co-founder and CEO Jacob Karstens stated in an interview with TechCentral on Monday that they have spent decades trying to understand how to integrate people into the official property system, emphasizing the need for the formal system to recognize assets that people already own.
Karstens, a qualified accountant, spent twenty years as a Credit Executive Director at Capitec, where he was supervised by the bank's data-driven decision-making teams. He noted that the key was synchronizing operations with data so that both sources told the same story.
The scale of the problem DigiDeeds solves is enormous. Citing the African Housing Finance Centre's 2024 annual report, the company points out that only 6.9 million out of 17.8 million homes in South Africa have a title deed. According to the company, more than 35 million people live in dwellings not included in the official property system, including informal and RDP houses, courtyard rooms, and rural homes on communal land.
For these people, proving an address may require a trip to the district councilor. During a DigiDeeds community survey, one person described spending 38 rand on a taxi and taking a day off, unsure if the councilor would be present.
Free for Participants
The application verifies three aspects. A participant takes a selfie and photographs their ID or passport; the application scans the barcode for the ID. Then, the user marks the location of their home and photographs it, with the coordinates being cross-referenced with GPS and the Geographic Information System (GIS). Finally, seven neighbors confirm the address and indicate whether the person is the owner, tenant, or simply a resident of that home.
When asked about the legal validity of a DigiDeed, Karstens referred to Roman law, stating: 'If seven Romans say so, then so it is.' DigiDeeds claims to have a lawyer's opinion that this approach complies with current legislation. He added that they do not provide land or title because, as is known, people do not own the land.
The application itself is free for participants. DigiDeeds makes money from data. The company acquires GIS data, enriches it with information provided by its members and neighbors, and sells the resulting output to credit bureaus, which Karstens calls 'wholesalers,' as well as banks, which he calls 'retailers.'
Karstens explained: 'We buy some GIS data, enrich it significantly, and sell it through service providers.' He reported that each participant generates 26 data points, from which DigiDeeds derives 11 'features' for use in credit models, currently totaling over 200,000 data points. Neighbors have provided over 40,000 confirmations. The platform also calculates a 'stability indicator' on a scale of 0 to 100.
He mentioned that three major banks and three primary credit bureaus have acquired this data for testing, though he did not name them, citing non-disclosure agreements. DigiDeeds positions these records as 'alternative data' to improve customer assessment by creditors, as well as as address verification for Know Your Customer checks in accordance with the Financial Intelligence Act (Fica).
Karstens asserts that a DigiDeed can be pledged to a creditor as collateral through assignment, providing households with collateral they never had.
Fraud and Privacy
The database of IDs, selfies, house photos, and GPS coordinates of low-income households presents an obvious target. Karstens reported that the DigiDeeds application and database were developed by the Stellenbosch Octoco software group and its subsidiary Polymorph, based on Neo4j, a graph database that, according to him, already helps detect fraudsters. The company has a full-time Chief Information Officer, and Karstens is registered as an information officer under the Protection of Personal Information Act. Participants consent to the use of their data in the application.
He warned: 'As soon as someone becomes the easiest target, they will start being attacked.' DigiDeeds operates exclusively in established settlements, including informal housing within them. Karstens clarified that they do not serve those who are illegally on the land.
DigiDeeds was established in November 2024. Karstens noted that the company has over 100 investors. Its co-founder and non-executive director is Charles Robertson, a property developer. Ruben Richards is the chairman, and other non-executive directors include Jan Abrahamse, a banker who worked with Karstens at Capitec, and Marcus Kurag, founder of the consulting firm Africa Practice.
Karstens aims to attract 125,000 participants within 12 months. It requires 500,000 to comfortably reach the break-even point. DigiDeeds plans to add services such as solar energy, grid connection, and security, which providers can offer to participants with verified housing, and Karstens reported that the company has received invitations to expand to other countries starting next year.
His statements regarding potential economic impact are even more ambitious. When asked about studies on the potential value that could be unlocked, he replied that he himself had not conducted such studies. Nevertheless, he believes that if banks and other institutions adopt this model, it could double the pace of South Africa's economic growth.
