Contributed by Vincent Shimutwikeni, B. Juris, LLB (honours), CGRC-BP™, Manager: Legal Support
This article explores the growing role of pension-backed housing finance in Namibia, following the Minister of Finance’s decision to reduce the minimum interest rate on housing loans from pension funds, from repo + 4% to repo + 2.5%, effective 1 July 2025. This policy change has revived national debate and renewed government and industry interest in making home ownership more accessible through retirement savings.
Readers will find a clear and practical explanation of the two main ways pension funds can assist members with housing:
Readers will find a clear and practical explanation of the two main ways pension funds can assist members with housing:
- Direct housing loans from a pension fund’s assets, where the fund itself lends to members; and
- Pension-backed housing loans (PBHLs), where the fund provides a guarantee to a commercial lender that advances the loan.
The article breaks down the legal framework under Sections 19(5) and 37D of the Pension Funds Act, explains eligibility limits (usually one-third of a member’s benefit), and discusses how repayments, defaults, and safeguards work in practice.
It also provides perspectives for all stakeholders:
- Members learn what types of properties qualify, repayment rules, and how loans affect their savings.
- Employers gain insight into their role in verifying employment, processing payroll deductions, and supporting staff welfare.
- Administrators and funds receive guidance on governance, compliance, documentation, and risk management requirements under NAMFISA oversight.
- Policy and national development aspects are also covered, highlighting how these loans could stimulate the construction sector and enhance housing security in both urban and communal areas.
In short, the article offers a comprehensive yet practical guide to understanding how pension savings can be responsibly leveraged for housing — a topic of growing importance for both public and private sector funds.
Important notice and disclaimer
This article summarises the understanding, observation and notes of the author and lays no claim on accuracy, correctness or completeness. RFS (Pty) Ltd does not accept any liability for the content of this contribution and no decision should be taken on the basis of the information contained herein before having confirmed the detail with the relevant party. Any views expressed herein are those of the author and not necessarily those of RFS.
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