Justicia Shipena
Civil servants will be able to access home loans under the Pension Backed Home Loan Scheme (PBHLS) starting January 2026.
The Government Institutions Pension Fund (GIPF) and the office of the prime minister signed a Memorandum of Agreement (MoA) to implement the scheme on Wednesday.
The MoA was signed by secretary to cabinet Emilia Mkusa and GIPF chief executive officer Martin Inkumbi.
The scheme allows qualifying members to borrow up to one-third of their pension savings to buy or build a home, purchase land, or renovate existing properties in both proclaimed and unproclaimed areas.
Inkumbi said the loans will be repaid at a rate of repo plus 2.5%, with pensions serving as collateral.
He stressed that members’ retirement benefits will not be affected.
“The PBHLS is designed in such a manner that active members’ retirement will not be negatively impacted at the time of retirement,” Inkumbi said.
Mkusa said the scheme will give civil servants financial stability.
“The commencement of the PBHLS will enable qualifying civil servants to secure residential properties and have financial security, stability and peace of mind, knowing that they are providing a safe place for their families and future generations,” she said.
The scheme also allows members to transfer existing home loans from banks or other financial institutions.
Applications will be processed through employers’ human resources departments and administered by First Capital Treasury Solutions and Kuleni Financial Services.
Administrators have four months to finalise all modalities before the rollout begins in January 2026.
The GIPF urged members to remain patient while preparations are completed.
It said it will continue to share information to help members make informed decisions.
Over the past two years, the Fund has run awareness campaigns countrywide to explain the scheme.
Kavango West Governor Verna Sinimbo welcomed the initiative, saying it could improve living standards in her region.
The ministry of finance endorsed the scheme in June, describing it as a step toward affordable housing for government employees.
Finance minister Ericah Shafudah told the National Assembly at that time that the scheme is being implemented with the Namibia Financial Institutions Supervisory Authority (Namfisa) and GIPF and underwritten by the office of the prime minister.
However, critics have raised concerns. In June, financial experts and union leaders warned that the scheme could push civil servants into debt if not aligned with wage growth.
Teachers Union of Namibia (TUN) secretary general Mahongora Kavihuha said the scheme is “another loan product” that fails to empower workers. He argued that even with lower interest rates, the loans remain a financial burden.
Economist Josef Sheehama previously told the Windhoek Observer that the scheme has both advantages and risks.
He warned that defaults could force the pension fund to cover losses, putting retirement savings at risk. He also noted that tying the loan to the repo rate creates uncertainty and may encourage borrowing against pensions.
According to the GIPF 2024 annual report, the Fund invested in servicing 5,884 plots, built 7,840 housing units, and financed 3,286 house purchases through the First Capital Housing Fund.
By 2023, GIPF had 97,512 active members contributing N$4.8 billion, a 3% rise from the previous year. Benefit payments fell by 9% to N$6.3 billion.
The Fund’s assets were valued at N$167 billion in the 2023/2024 financial year. Of this, N$117.1 billion was managed by investment managers, N$10.1 billion was held as direct investments, and N$40 billion was in the treasury portfolio. Returns increased to N$18 billion, up from N$6.5 billion the previous year.
