The Government Institutions Pension Fund (GIPF) has announced its readiness to launch its pension-backed home loan scheme.

Conceptualised in 2016 and approved by various regulatory channels in 2018, the scheme will enable GIPF members to leverage their pension savings to acquire homes or purchase land.

The scheme aims to enhance living conditions for GIPF members as well as address the housing issue in the country.

Unlike mortgage bonds, the scheme will enable members to use a third of their pension fund to secure a loan to purchase or build property.

General Manager for Marketing and Stakeholder Engagement at GIPF, Edwin Tjiramba, said that they had already been given approval by the Office of the Prime Minister as well as the regulator, NAMFISA, in 2018.

"We are talking about either having to buy an existing home, to build a new place, to renovate an existing place, or to buy an erf on which you will build a permanent home, and/or to pay off a mortgage that you currently have with another institution."

Tjiramba said that an interest rate of 9.25% will be set in order for money to be put back into the pool of funds belonging to other members.

"You have to pay at a variable interest rate; not only is it the law that dictates so, but it's also to protect your own capital. Because what we want to see is that by the time you are 40, you have borrowed one million. In 20 years, when you retire, we want to ensure that you are restored to the original position you were in had you not borrowed."

He added that once the scheme commences, members will be able to apply at the offices of their respective employers.

Tjiramba urged members to familiarise themselves with their benefit statements to evaluate how much they are allowed to borrow.