GIPF housing scheme ready by year-end
The Government Institutions Pension Fund (GIPF) is on track to launch its pension-backed housing scheme by the end of 2025, enabling members to use a portion of their pension savings for home loans.
With a low interest rate of 9.25% and streamlined eligibility criteria, the scheme could open the door to homeownership for thousands, particularly in rural Namibia, according to GIPF’s Edwin Tjiramba.
Speaking on the Business 7 show this week, executive spokesperson Edwin Tjiramba said the pension fund is now preparing to ensure it clears any remaining regulatory hurdles.
The scheme will enable GIPF members to access part of their pension benefits to buy or build a home – a progressive model offering more flexible financing, particularly for those in rural or underserved areas.
“The signing ceremonies are done. We want to give ourselves about three months to ensure all the ducks are in a row for the project to start. We cannot say with certainty when exactly this will happen, but we definitely hope and aspire to have the fund up and running before the end of this year,” Tjiramba said.
Affordability
The scheme will allow GIPF members to access a portion of their pension funds at an approved interest rate: the repo rate (the rate at which commercial banks borrow money from the Bank of Namibia) plus 2.5% – signalling affordability.
According to Tjiramba, the key benefit is the preferential interest rate members will enjoy under the scheme. The Pension Funds Act 24 of 1956 allows for a repo rate plus four. Typically, banks add their own mark-up on top of this.
“With the revised and approved rate, it is now repo rate plus 2.5%, meaning our members can access loans at a much lower rate – currently 9.25% – compared to prevailing prime lending and mortgage rates. That’s about 2% lower than what’s generally available to the public,” he said.
Despite the scheme’s affordability, key safeguards will be implemented to avoid overburdening members, Tjiramba explained.
“Administrators will conduct affordability checks to ensure that members can truly afford the loan. The key criteria are having sufficient pension savings and a healthy transfer or withdrawal benefit, from which a third may be accessed,” he said.
“We won’t require things like a health check, which are typically part of loan applications. However, affordability remains crucial and must be assessed,” he added.
Background
First Capital Housing Scheme and Kuleni Financial Services are the two appointed agents to administer the scheme.
The GIPF has been working on this initiative since 2016, when the Board of Trustees approved a proposal to amend the fund’s rules to allow for a pension-backed housing loan model.
In 2018, the rule amendment was approved by the Office of the Prime Minister and the Namibia Financial Institutions Supervisory Authority (NAMFISA), paving the way for the scheme’s eventual establishment in 2021.
The GIPF had 97 512 active members in the 2023 financial year, contributing a total of N$4.8 billion – a 3% increase from the previous year.
Benefit payments, meanwhile, fell by 9% to N$6.3 billion.
GIPF’s asset base stood at N$167 billion for the 2023/2024 financial year, with N$117.1 billion managed by investment managers.
A further N$10.1 billion was held in direct investments, and N$40 billion was allocated to the GIPF Treasury Portfolio.
The fund also recorded a 13.2% increase in return on investment, generating N$18 billion – up from N$6.5 billion the previous year.
The GIPF board approved the pension-backed housing loan initiative around three years ago. At the time, former GIPF CEO David Nuyoma stated that the fund was awaiting deduction codes from the Ministry of Finance and a Memorandum of Understanding (MoU) with the government.
According to the GIPF’s 2024 annual report, the fund has invested in the servicing of 5 884 plots, built 7 840 housing units, and financed 3 286 home purchases through the First Capital Housing Fund.
With a low interest rate of 9.25% and streamlined eligibility criteria, the scheme could open the door to homeownership for thousands, particularly in rural Namibia, according to GIPF’s Edwin Tjiramba.
Speaking on the Business 7 show this week, executive spokesperson Edwin Tjiramba said the pension fund is now preparing to ensure it clears any remaining regulatory hurdles.
The scheme will enable GIPF members to access part of their pension benefits to buy or build a home – a progressive model offering more flexible financing, particularly for those in rural or underserved areas.
“The signing ceremonies are done. We want to give ourselves about three months to ensure all the ducks are in a row for the project to start. We cannot say with certainty when exactly this will happen, but we definitely hope and aspire to have the fund up and running before the end of this year,” Tjiramba said.
Affordability
The scheme will allow GIPF members to access a portion of their pension funds at an approved interest rate: the repo rate (the rate at which commercial banks borrow money from the Bank of Namibia) plus 2.5% – signalling affordability.
According to Tjiramba, the key benefit is the preferential interest rate members will enjoy under the scheme. The Pension Funds Act 24 of 1956 allows for a repo rate plus four. Typically, banks add their own mark-up on top of this.
“With the revised and approved rate, it is now repo rate plus 2.5%, meaning our members can access loans at a much lower rate – currently 9.25% – compared to prevailing prime lending and mortgage rates. That’s about 2% lower than what’s generally available to the public,” he said.
Despite the scheme’s affordability, key safeguards will be implemented to avoid overburdening members, Tjiramba explained.
“Administrators will conduct affordability checks to ensure that members can truly afford the loan. The key criteria are having sufficient pension savings and a healthy transfer or withdrawal benefit, from which a third may be accessed,” he said.
“We won’t require things like a health check, which are typically part of loan applications. However, affordability remains crucial and must be assessed,” he added.
Background
First Capital Housing Scheme and Kuleni Financial Services are the two appointed agents to administer the scheme.
The GIPF has been working on this initiative since 2016, when the Board of Trustees approved a proposal to amend the fund’s rules to allow for a pension-backed housing loan model.
In 2018, the rule amendment was approved by the Office of the Prime Minister and the Namibia Financial Institutions Supervisory Authority (NAMFISA), paving the way for the scheme’s eventual establishment in 2021.
The GIPF had 97 512 active members in the 2023 financial year, contributing a total of N$4.8 billion – a 3% increase from the previous year.
Benefit payments, meanwhile, fell by 9% to N$6.3 billion.
GIPF’s asset base stood at N$167 billion for the 2023/2024 financial year, with N$117.1 billion managed by investment managers.
A further N$10.1 billion was held in direct investments, and N$40 billion was allocated to the GIPF Treasury Portfolio.
The fund also recorded a 13.2% increase in return on investment, generating N$18 billion – up from N$6.5 billion the previous year.
The GIPF board approved the pension-backed housing loan initiative around three years ago. At the time, former GIPF CEO David Nuyoma stated that the fund was awaiting deduction codes from the Ministry of Finance and a Memorandum of Understanding (MoU) with the government.
According to the GIPF’s 2024 annual report, the fund has invested in the servicing of 5 884 plots, built 7 840 housing units, and financed 3 286 home purchases through the First Capital Housing Fund.
