The Government Institutions Pension Fund (GIPF) announced on Monday that GIPF has unlocked pension access for housing, with up to N$900 million committed to helping members buy or build homes.
Members can now borrow up to one-third of their pension benefits to purchase or construct houses through First Capital Housing Scheme and Kuleni Financial Services.
“The scheme has come a long way. While I won’t delve into the entire history, it’s sufficient to say that we are now at a point where GIPF members can actively use part of their pension savings for housing,” said the CEO Martin Inkumbi.
He added that, two service providers have been appointed to administer the loan process, following a competitive selection procedure.
These are Kuleni Financial Services, a wholly owned subsidiary of GIPF, and FaceKit Finance, a private lending facilitator.
Kuleni is expected to handle 65% of the administrative workload, with First Capital Housing Scheme managing the remaining 35%.
“It’s important to clarify that the capital itself is coming from GIPF,” the spokesperson added. These two entities are tasked solely with administration, not lending from their own funds,” he said.
The initiative is expected to ease the housing burden for thousands of civil servants, many of whom have historically struggled to qualify for traditional home loans through commercial banks.
The selection of the administering entities involved consultation with several financial institutions, including banks, although only Kuleni and FaceKit were ultimately selected.
GIPF has assured members that further details, including application procedures and eligibility, will be disseminated through formal communication channels in due course.
Inkumbi said, “if the money is not paid back and a member is nearing retirement, and they have used a portion of their pension to buy or build a home, this naturally affects the total pension benefit they’ll receive at retirement. The lump sum they would normally get, typically up to one-third might be reduced or even unavailable, depending on how much was used for the house.
“But here’s the key point: members will never lose their house, as it was acquired with their pension savings – and that’s secure. So, while they may not get the full lump sum at retirement, they still have the remaining two-thirds of their pension, which will provide them with a monthly income for life. And perhaps most importantly, they have a home of their own. That stability can be more valuable than a one-time payout,” he said.
He added: “That’s why they always emphasise how crucial it is for both the fund and the member to ensure pension money is used wisely and for genuine retirement-related needs. In the end, even if the member has a smaller lump sum, they haven’t lost out. They’ve simply exchanged part of it for something just as meaningful – a place to call home”.
Finance minister Ericah Shafudah announced the approval of the Pension-Backed Home Loan (PBHL) scheme, developed in collaboration with the Namibia Financial Institutions Supervisory Authority (Namfisa) and the GIPF. The initiative is spearheaded by the Office of the Prime Minister.
“The scheme is aimed at improving access to affordable housing, especially for civil servants who are often excluded from traditional mortgage financing due to income limitations or lack of collateral,” she said.
She stated that the scheme allows GIPF members across both proclaimed and unproclaimed areas to use a portion of their pension savings as collateral.
“The loan can be used to buy land or residential property, build or renovate a home, settle an existing mortgage or improve basic living conditions,” Shafudah announced.
She noted that the initiative is supported by the Pension Funds Act of 1956, which permits loans for housing secured against pension fund assets.
At a media briefing, the Trade Union Congress of Namibia (TUCNA) has strongly opposed to GIPF’s new housing loan initiative, describing it a “ruthless, insensitive and self-centred”.
Speaking at the briefing, TUCNA secretary general Mahongora Kavihuha slammed the GIPF housing plan.
He argued that it prioritises corporate profit over the well-being of Namibian workers, whose pensions make up the fund.
“Pension funds are the workers’ money. It should be one of the few instruments we can use to address inequality and drive inclusive development. Instead, what we see is a move that undermines the principle of equitable wealth distribution,” he said.
TUCNA questioned GIPF’s decision to channel the new housing loan scheme through only two pre-selected financial service providers.
Kavihuha said this exclusive partnership raises serious questions about fairness, transparency and accountability.