Low-earners can now access housing loans

15 May 2014 16:00pm
WINDHOEK, 15 MAY (NAMPA) – Government employees who earn below N.dollars 5 000 per month can now access home loans from the Government Institutions’ Pension Fund (GIPF) Housing Loan Scheme.
These low-earners are part of an estimated 60 per cent of Government employees financially excluded in accessing home loans, First Capital Namibia’s Chief Executive Officer Martin Mwinga revealed on Thursday.
Speaking at the launch of the long-awaited GIPF Housing Loan Scheme in the capital on Thursday, Mwinga said public servants earning below N.dollars 5 000 per month cannot access housing loans from lending institutions, as the minimum home loan amount at some banks is N.dollars 200 000.
The First Capital Housing Fund will be responsible for receiving and assessing GIPF members' applications for housing, finance, effecting payments as well as collecting repayments on a monthly basis, while the GIPF will closely monitor the implementation of the scheme.
Currently, Bank Windhoek and Standard Bank Namibia require one to earn N.dollars 5 000 per month and above in order to be considered for a home loan.
With the GIPF Home Loan scheme, a salary of N.dollars 5 000 and below can now afford a GIPF member a home loan of about N.dollars 430 618.
Mwinga described the commissioning of the GIPF Home Loan Scheme as a milestone in the history of the country.
“The initiative is an intervention in the challenged housing market, which aims to alleviate poverty, create employment and bring a positive difference in the lives of Namibians,” he stated.
He added that this scheme targets the group of people who are already excluded by commercial banks for home loans.
Mwinga was, however, quick to explain that the scheme will not hinder the profitability of commercial banks in the country, but will help commercial banks to be innovative and move away from the dependence on properties.
The aim of the scheme is to accommodate as many people to access houses and live in them. The loans are repayable at an interest rate of 9,5 per cent (repo rate plus four per cent).
This translate into affordable rates, and GIPF members can now easily participate, unlike in the past when the interest rate was fixed at 16 per cent.