Qualifying members of the Government Institutions Pension Fund (GIPF) will be able to borrow under the Pension-Backed Home Loan Scheme (PBHLS) from 12 January 2026.
This follows the signing of a Memorandum of Agreement (MoA) between the Secretary to Cabinet, Emilia Mkusa, and GIPF Chief Executive and Principal Officer, Martin Inkumbi.
Inkumbi said the scheme is enabled by the Pension Funds Act No. 24 of 1956, as amended, and the GIPF Fund Rules. It allows qualifying members to borrow up to one-third of their pension benefit, repayable at a rate of Repo plus 2.5%, for housing-related purposes.
“The PBHLS enabled by the Pension Funds Act No. 24 of 1956 as amended, and the GIPF Fund Rules, will allow a qualifying GIPF member to borrow up to one third (1/3) of their pension benefit and repayable at a rate of Repo plus 2.5%, for the purchase of a home or land, construction of new houses, home improvements or renovations to existing property, in urban and rural areas, proclaimed and unproclaimed areas across the country,” Inkumbi said.
Mkusa welcomed the initiative, saying it would bring financial security to civil servants.
“The commencement of the PBHLS will enable qualifying civil servants to secure residential properties, and have financial security, stability and peace of mind, knowing that they are providing a safe place for their families and future generations,” she said.
Inkumbi added that the MoA formally signified the start of the scheme, with administrators given four months to finalise modalities before loans become available in January.
The GIPF explained that the PBHLS will allow active members to use part of their pension savings as collateral for buying erven, constructing or improving homes, or transferring existing mortgages financed by commercial banks and other financial institutions into the new scheme. Unlike mortgage-backed loans, where the property serves as collateral, the PBHLS will use a member’s pension credit or resignation transfer benefit (up to 33.33%) as collateral.
“The PBHLS is designed in such a manner that active members’ retirement will not be negatively impacted at the time of retirement, as all outstanding loan amounts would have been repaid by the time the member reaches their retirement,” Inkumbi said.
Applications will be submitted through members’ Human Resources offices and processed by one of the two appointed administrators, First Capital Treasury Solution (Pty) Ltd and Kuleni Financial Services (Pty) Ltd. Funds will be released by the administrators directly to service providers.
