15 May 2014 13:40pm
WINDHOEK, 15 MAY (NAMPA) The Government Institutions Pension Fund (GIPF) on Thursday commissioned its long-awaited housing loan scheme.
The scheme will bring relief to low-paid GIPF members, especially those Government employees who cannot access home loans from commercial banks.
The scheme has dominated public discussions for a considerable period and the members have been keenly awaiting its implementation.
Today we are celebrating the achievement of another milestone within the space of service delivery to our members.
It has taken us too long to arrive at this stage but it is essential to say that it was worthwhile to sort out an avalanche of barriers in the first place to ensure smooth sailing of this major project, GIPF Chief Executive Officer David Nuyoma said during the launch in the capital.
The interest rate on the housing loans has been reviewed at 9,5 per cent (repo rate plus four per cent), which translates to affordable rates, and members can now easily participate unlike in the past when the interest rate was fixed at 16 per cent.
The loan can be accessed by members of the GIPF only, and they must be permanent employees of Government.
The minimum loan amount is N.dollars 5 000 and applicants will not be allowed to borrow more than 90 per cent of the propertys market value.
The Pension Funds' Act in its current form only makes provision for home loans in respect of houses situated in urban areas.
However, Nuyoma noted, it does not cover houses situated in rural or unproclaimed areas.
In light of this limitation we shall only concentrate on proclaimed areas for now, he emphasised.
GIPF decided to split the idea of housing assistance into two categories.
The first category launched on Thursday is a mortgage-backed scheme operating on a revolving basis and falls under property investments.
The second category is referred to as pension-backed home loan for which pension is ceded as guarantee.
This category is yet to be introduced upon amendment of the Pension Funds' Act.
If the amendments are ratified, members residing in unproclaimed areas will be able to participate and the fund will be duly authorised to enter into this line of activity.
The First Capital Housing Fund will be responsible for receiving and assessing members' applications for housing, finance, effecting payments as well as collecting repayments on a monthly basis, while GIPF will closely monitor the implementation.
First Capital is a financial services company which specialises in providing treasury, asset management, consulting and lending services.