Civil servants, most of whom are members of the Government Institutions Pension Fund (GIPF), will be able to use a portion of their pensions to either build a house or make improvements to existing properties by January next year. This is after the highly anticipated government approved scheme was made official this week during a signing of a Memorandum of Agreement (MoA) between Secretary to Cabinet, Emilia Mkusa and chief executive officer of the GIPF, Martin Inkumbi.
GIPF’s Pension-Backed Home Loan Scheme (PBHLS) is designed to improve access to affordable housing for civil servants. This intervention is aimed at reducing Namibia’s skyrocketing housing backlog that has been exacerbated by the lack of serviced land and access to adequate financing.
Under the PBHLS, GIPF members will be able to use a portion of their pension savings as collateral for home loans, enabling greater opportunities for homeownership while leveraging retirement savings responsibly.
GIPF has urged members to remain patient as administrators finalise all operational modalities. This includes engaging human resources officials and members nationwide on required processes and documentation, as well as ensuring deduction codes are properly set up.
The GIPF will continue to proactively provide information and awareness on the PBHLS, enabling members to make informed decisions regarding their participation.
“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 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 un-proclaimed areas across the country,” said Inkumbi.
HE added that the signing of the MoA signifies the commencement of the PBHLS as the administrators will have four months to finalise all modalities enabling members to commence with borrowing on 12 January 2026.
The member’s pension acts as guarantee or collateral for the home loan. In the instance of a mortgaged backed home loan through commercial banks, or through First Capital Housing Fund, the property serves as collateral. In the case of the PBHL, the pension credit or resignation transfer benefit (to the maximum of 33.33%) acts as collateral. The scheme is only available to active members (members who are currently employed and contributing monthly towards their pension).
“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,” said Inkumbi. Active members would be required to visit the human resources offices of their respective employers. The applications would be submitted to one of the two identified administrators, namely, First Capital Treasury Solution (Pty) Ltd and Kuleni Financial Services (Pty) Ltd as the two agents that will administer this scheme. The payments and or funds would be released by the administrators to the service providers.
“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,” said Mkusa.
-pmukokobi@nepc.com.na