STAFF WRITER
The Government Pension Institution Fund (GIPF) Chief Executive Officer Martin Inkumbi on Monday said the fund has set aside N$900 million that civil servants can borrow to buy or build their houses.
Members are allowed to borrow a third of their pension to build or buy houses.
The initiative was earlier announced by Minister of Finance Ericah Shafudha in parliament during the budget announcement. Inkumbi said two companies have been appointed to do administration work of the scheme. The two are Kuleni which is a subsidiary of GIPF and First Capital which already has a housing scheme with GIPF.
They were selected after a rigorous process,Inkumbi said.
“We have selected two companies that will help with the administration of the find . The first one is Kulen which is a subsidiary of GIPF and they will deal
With the bulk of administration part of the work. We have also selected First Capital, a fund manager to assist. The two were selected among many others that sent their proposals. We will do our best to make sure that the money is used for the purpose it’s meant to, “ Inkumbi said.
He also appealed to members not to abuse the funds.
“In terms of impairment ratio we will make sure that members do pay. In instances that members fail to pay Of course that will affect their payout. The only effect that is there is that the member will not access that third form of their final pension payout when they retire but the other two thirds will be there,” he said.
Minister of Finance Erica Shafudha announced the development in parliament earlier in the year presenting a national budget..
She said the new pension backed loan scheme will benefit civil servants who want to use a portion of their pension savings as collateral to buy houses.
Shafudha announced the historic and potentially game changing Development in parliament on Wednesday.
“I stand before this August House to brief honourable members of the house that, government , through the Ministry of Finance and in collaboration with the Namibia Financial Institutions Supervisory Authority (NAMFISA) and the Government Institutions Pension Fund (GIPF), has endorsed and is implementing the Pension-Backed Home Loan (PBHL) scheme. This process is underwritten by the Office of the Prime Minister, “ she said.
Shafudha told parliament that the initiative was introduced as part of the government’s commitment to improve access to decent and affordable housing, particularly for civil servants who are unable to meet conventional bank loan requirements.
“Under the scheme, members of GIPF, both in proclaimed and unproclaimed areas, will be able to use a portion of their accumulated pension savings as collateral for home loans. This facility may be used to purchase residential property or land intended for housing, construct or renovate a dwelling,settle an existing home loan, or improve basic housing conditions,” she said.
She said the Pension Funds Act 24 of 1956, as amended, allows a pension fund to provide loans to its members for housing purposes in proclaimed and
unproclaimed areas.
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