The Government Institutions Pension Fund (GIPF) has committed N$900 million towards a pension-backed housing loan scheme that will allow members to borrow up to one-third of their retirement savings to buy or build homes.
According to GIPF CEO Martin Inkumbi, the capital for the loans will be provided directly by the Fund.
All repayments, including interest, will be paid back into the member’s individual pension account. This approach, he said, enables members to access housing finance without eroding their long-term retirement savings.
“At this moment, up to N$900 million has been committed for that purpose. GIPF will make the capital available from which members can borrow up to one-third of their benefit for the purpose of either buying or building a home,” Inkumbi said on Monday.
He explained that the loans would carry an interest rate of 9.25%, approximately two percentage points lower than what most commercial banks currently offer.
Two entities have been appointed to administer the scheme following a competitive selection process.
Kuleni Financial Services, a wholly owned GIPF subsidiary, will manage around 65% of the administrative workload, while First Capital will handle the remaining 35%.
Both were selected from a pool that included several commercial banks and other lending institutions.
“I must mention that it was not only these two entities that were invited to submit proposals. Many other lenders, including commercial banks, were approached, and the two were selected based on merit,” he added.
The scheme will require compliance with all relevant housing standards and regulations. In cases where loans are used for home construction, regular inspections will be carried out to ensure that building progresses in line with approved plans and timelines.
Inkumbi also noted that safeguards are in place to manage potential defaults. If a member fails to repay their loan, the outstanding amount will be deducted from their pension benefit. This means the member would only be entitled to access two-thirds of their invested funds, rather than their full benefit—ensuring the long-term sustainability of the scheme.
“And when they are paying interest on that, they are effectively paying that interest back to their own pension benefit, so that the money they’ve withdrawn does not lose its time value,” he said. The scheme is expected to be launched after the signing of a Memorandum of Understanding (MoU) between GIPF and the Office of the Prime Minister. Once signed, a three-month administrative phase will follow, after which application forms will be made available to members.
