The Government Institutions Pension Fund’s (GIPF) Pension-Backed Home Loan Scheme (PBHLS) will commence on Monday.
The scheme offers qualifying members access to housing loans using a portion of their pension savings as collateral.
GIPF spokesperson Edwin Tjiramba says the scheme is limited to active members employed by the government, as well as members on disability.
Other participating employers, including state-owned enterprises and mission hospitals, will only be included once outstanding agreements are finalised.
“The PBHLS will enable active members to access a portion of their pension savings as collateral for the purchase of an erf, to make improvements to an existing home, to purchase a new home, or for the construction of a new home in both urban and rural areas,” Tjiramba says.
The scheme also allows members to transfer existing home loans from commercial banks or other financial institutions to the pension-backed facility.
Loans under the scheme will carry a variable interest rate linked to the Bank of Namibia’s repo rate.
The GIPF says the current applicable rate is the repo rate of 6.5% plus 2.5%, resulting in an effective interest rate of 9.0%.
“Variable interest rate means that should the repo rate change by either being lowered or increased by the Bank of Namibia, the interest rate charged to the member will be adjusted accordingly,” Tjiramba says.
He adds that members should expect loan instalments to change when the repo rate moves.
Tjiramba says the maximum access level of 33.33% of a member’s pension credit was determined based on actuarial recommendations.
The fund has appointed First Capital Treasury Solutions and Kuleni Financial Services (Pty) Ltd as administrators of the scheme.
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