GIPF ready to offer home loans

The Government Institutions Pension Fund (GIPF) says it is ready to introduce pension backed home loans to members following the amendment of Regulation 27 of the Pension Funds Act in January.
Elvis Nashilongo, GIPF’s General Manager for Marketing and Corporate Communication told the Economist Thursday that the fund is now ready to roll out housing loans through First Capital Asset Real Estate Finance Fund, a fund that has been awarded the mandate to administer the scheme.
“The good news is that in terms of the new Regulation 27, the interest rate on direct housing loans is now set at Repo plus four percentage points. Basically this means that the effective rate for housing loans within this arrangement will now be set at 9.5%,” Nashilongo exclusively told the Economist.

Under the old Regulation 27, pension funds were required to charge members 16% interest rate on direct home loans, a requirement which rendered pension backed home loans expensive and inaccessible to members.
Last week finance minister, Saara Kuugongelwa-Amadhila announced that amendments to the Pension Fund Act of 1956 have now been finalised allowing pension fund members to access part of their benefits to acquire homes even in communal areas. However, Nashilongo said this week that the GIPF home loans will in the interim be available to members who want to buy houses in urban areas.
“It is important to highlight that the new amendment of the Regulation only affect pension funds home loans within the proclaimed areas. Facilitation of pension backed home loans in rural areas is being handled through the amendment of the Pension Funds Act currently underway,” he said. First Capital Real Estate Finance Fund will manage and administer the scheme on behalf of GIPF. The special purpose vehicle fund will assess applications for housing finance, make payments as well as collect repayments on a monthly basis.
“Regarding our readiness to roll out the pension backed home loan, we are happy to state that First Capital Real Estate Finance Fund has prepared itself for members to access financing and soon the Fund in conjunction with the GIPF will make an announcement.”