09 Nov 2013 13:30pm
WINDHOEK, 09 NOV (NAMPA) Members of the Government Institutions Pension Fund (GIPF) will have to wait a little longer for the implementation of the Pension-Backed Home Loan Scheme.
Chairperson of the GIPF Board, Advocate Ellaine Samson said at the annual stakeholders dinner on Thursday night the scheme is at an advanced stage.
GIPF submitted proposals to the regulator, the Namibia Financial Institutions Supervisory Authority (Namfisa), on the amendments of the companys rules to enable it to give pension-backed home loans to members of the fund residing in rural areas.
We were overly optimistic about the implementation of the scheme by October this year, which proved to be impossible due to regulatory review process, which remain pending. However, rest assured that this matter remains one of our strategic priorities and we are doing everything along with other key players to reach final implementation, she stressed.
Some regulatory restrictions related to the granting of housing loans by pension fund schemes have been reviewed. In particular, the old Regulation 27 of the Pension Fund Act, which required that a 16 per cent interest rate be charged on direct home loans, is now amended and gazetted. Samson said the good news is that in terms of the new Regulation 27, the interest rate on housing loans is now set at repo rate plus four per cent. This basically means the effective rate for housing loans within this arrangement will now be 9.5 per cent.
In view of this development, GIPF would be able to grant housing loans through the First Capital Asset Real Estate Finance Fund of First Capital Asset Management. The fund has been awarded the mandate to operate in this area. The fund is also already advertising the loans on its website (www.firstcapitalnam.com), where it says all Government employees who have been confirmed in their employment under permanent and pensionable basis and earning up to N.dollars 20 000 per month are eligible to apply for a housing loan.
To qualify, applicants must be Government employees and members of GIPF; earn up to or less than N.dollars 20 000 per month; produce proof of land ownership or permission to occupy in both proclaimed and unclaimed areas; able to afford monthly housing expenses (mortgage payment, taxes, insurance, maintenance) taking into account income, assets, other debts (car loans, credit card payments, etc.), and job stability. A good credit record is a prerequisite.
GIPF members increased from 88 000 during the last financial year to over 94 000 members this financial year.