STAFF WRITER
Namibian civil servants can now use a portion of their pensions as collateral for loans to buy residential properties.
Minister of Finance Erica Shafudha announced the development in parliament on Wednesday.
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.
Shafudha said the Government is finalising administrative arrangements with GIPF and payroll systems to ensure seamless implementation. “Civil servants will soon receive further communication from the GIPF and their respective ministries regarding eligibility, terms, and the application process,” she said. She added that , “The Government has set the pricing of the scheme at the Bank of Namibia’s Repurchase Rate (‘Repo Rate’) plus 2.5 percent to ensure a national affordability objective for targeted scheme beneficiaries.
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