2013-11-25Staff Report 2 WINDHOEK – The Government Institutions Pension Fund (GIPF) has decreased the interest rate on home loans from 16 percent to 9.5 percent, says Elvis Nashilongo, GIPF corporate communications manager. The bone of contention for many members of the fund has been the painstaking 16 per cent interest rate that the fund charges for home loans, which they moaned is too high and must come in line with the market rate and commercial banks whose interest rates are much lower. Nashilongo told New Era that according to the new regulation 27, the interest rate on direct housing loans will now be set at repo plus four, which means that the effective rate for housing loans within this arrangement will now be at 9.5 percent. “In terms of the old regulation 27 interest rate on housing loan was placed at 16 percent making the scheme unaffordable and inaccessible to members. The only matter outstanding is a regulatory amendment to allow the scheme to cater for housing in the areas not proclaimed,” he disclosed. He further revealed that GIPF had given a mandate to First Capital and Real Estate Trust Fund to provide housing loans to members of the fund, which is separate from the GIPF Housing Scheme. In May this year, the GIPF announced at an annual stakeholders’ meeting that by October, amendment of the fund’s rules could be finalised to pave way for the introduction of a pension ‘backed-up’ home loan scheme to supplement the already existing government housing scheme. But he says they might have been over optimistic to set the deadline at end of October. “Definitely we have been working tirelessly on the Housing Project,” he said, adding that progress has been achieved and that the fund’s regulator, NAMFISA, in conjunction with the Ministry of Finance, has given priority to this matter and they would soon obtain concrete feedback regarding regulatory matters. The GIPF spokesperson further revealed that the fund has also been granted a deduction code from the Ministry of Finance in their efforts to institute administrative arrangements for the housing scheme. The deduction code entails permission to deduct loan repayments from members’ salaries and some draft agreements are already in place with some banks to be part of this pension-backed scheme. Housing has become one of the biggest bottle-necks in Namibia with prices shooting through the roof. GIPF Chairperson, Ellaine Samson, said at the consultative meeting that they were looking forward to discussing the most feasible and practical manner in which GIPF could join other national efforts in addressing the housing needs challenge. She said at the time that the prevailing plight of the housing needs in Namibia has caught the attention of everyone and the call of government for collaboration on this matter has been so far clear and the supply of housing, especially in the lower income category, was fuelling housing prices. According to First National Bank Housing Index prices for houses have increased by 25.3 percent since 2011. Samson said that the housing challenge required “a united front of different players ranging from the regulation of such schemes, access to funding, availability of land and affordability. Government announced a mass housing scheme to build 185 000 houses by the 2030. By Magreth Nunuhe 2013-11-25Staff Report 2
