The Government Institutions Pension Fund (GIPF) says it is at an advanced stage of launching a Pension Backed Home Loan scheme that will allow members to use their pension as collateral to buy or renovate property.
“I am therefore delighted to share that we are at the final stages of implementing this scheme. The Pension Backed Home Loan, will be a scheme that allows members to acquire and or renovate homes in both proclaimed and unproclaimed areas,” said Nilian Mulemi, Chairperson of the GIPF board of trustees.
“I am proud to announce that the GIPF Board of Trustees last year approved a Pension Backed Home Loan scheme after a protracted process that started during 2009 when the Office of the Prime Minister wrote to the Fund requesting for the establishment of a Pension Backed Home Loan Scheme,” she said.
The GIPF Chairperson said the planned loan scheme will also allow funding for the construction of property even in the rural areas.
“GIPF will be a pioneer to this initiative as most home loan schemes do not allow members to build homes in unproclaimed areas. The roll out of this scheme is due to take place in due course and members will be informed with the latest developments through an official launch and member information will be disseminated in mainstream media on all platforms,” Mulemi said.
She added that the scheme came out following an outcry from civil servants and other GIPF participating employers who were failing to secure housing loans.
She said unlike the First Capital Housing Fund, which the GIPF appointed in 2011, the new scheme will allow members to acquire properties in rural areas.
“One of our biggest challenges with the current First Capital initiative was that our members were unable to acquire homes in their villages and that will now become a thing of the past,” Mulemi said.
First Capital was appointed more than a decade ago to manage Home loan scheme to GIPF members, Infrastructure loans to Local Authorities as well as Mortgage securitization.
“Since conception approximately 3,000 home loans have been generated with GIPF participating employees such as Ministry of Defence, Ministry of Safety & Security and Ministry of Education, Arts and Culture in all 14 Regions to GIPF members ranging from cleaners, teachers, police officers and nurses. Most of the home loans where towards acquisition of plots and construction which resulted in the increase of the housing units in Namibia while stimulating economic growth through creation of employment,”she said.
Mulemi said First Capital has,however, made inroads in financing home loans in Village Councils and small Town Councils, where banks are normally reluctant to finance due to some perceived risks such as lack of secondary markets
“Most of the loans granted by First Capital which translated to 53% were awarded to women majority of which were single women. Additionally, 73% of First Capital’s loan book beneficiaries are low-income earners while about 80% are first time home buyers,” she said.
As at 31 January 2022, the GIPF had assets worth N$148 billion.
As of the last financial year, the Fund had serviced 5,127 plots, constructed 3,721 housing units and financed 2,468 housing loans.
The GIPF is a statutory pension fund which provides guaranteed pension and related benefits to over 101 027 civil servants, and employees of participating employers in Namibia.
