Pension Funds should provide loans for houses in communal areas

WINDHOEK: Finance Minister Saara Kuugongelwa-Amadhila tabled the Pension Funds’ Amendment Bill on Tuesday, aimed at authorising pension funds to grant loans and provide guarantees for members to acquire homes in communal areas.

The Pension Funds’ Act in its current form only makes provision for home loans in respect of houses situated in urban areas.

In presenting the Bill for discussion, she reminded her fellow Members of Parliament (MPs) that the country is currently faced with an acute shortage of houses, especially for the poorer segments of the population due to the high costs of housing and restricted access to finance.

“In an effort to address this situation, Government has scaled-up resources to housing development under the budget,” she explained.

In addition, Kuugongelwa-Amadhila said, Government has as an employer initiated additional measures to improve access to housing for civil servants through the amendment of the Government Institutions’ Pension Fund (GIPF) rules.

Some of these initiatives are that GIPF is now granting loans and providing guarantees to its members to acquire homes.

This, she pointed out, is beside the home acquisition scheme through which the State subsidises home loans for its employees.

“However, in spite of these efforts, a significant portion of our citizens remain restricted to access financing to acquire homes as they reside in communal areas,” stated the minister.

These citizens, due to the current land tenure system, are facing an even greater challenges to access financing.

Kuugongelwa-Amadhila said the proposed amendment would also allow pension funds to allow their members to access a part of their benefits to acquire or upgrade their homes in communal areas.

The amendment will furthermore allow for pension fund benefits to be used to securitize private bank loans for home acquisition.

“This Bill will go a long way to support existing efforts to improve the housing conditions of our people, and I urge the public to make good use of this facility,” she stressed.

Such loans must, however, be repaid by members.

“Failure by members to repay their loans will result in the erosion of their pension benefits,” Kuugongelwa-Amadhila noted.

SOURCE: NAMPA