The Government Institution Pension Fund (GIPF) has grown its housing loan scheme facilitated through First Capital Housing Fund (FCHF)) and meant to provide housing loans to members of the fund who are in full time employment from N$100 million in 2011 to N$750m to date.
The GIPF loan scheme makes sure that all loans are secured by first mortgage bonds over the properties funded and only properties in proclaimed areas are funded.
Information provided by the Fund’s Corporate Communications department to Prime Focus Magazine shows that the fund was started with a commitment of N$100 million in 2011 and subsequently increased to N$400 million and now currently stands at N$750 million.
“As at 31 December 2015, a total of 2,923 loan applications worth N$1.796 billion were received from borrowers around the country. Of these only 1,945 loan application worth N$1.052 billion were considered after the initial screening of the deed of sale. FCHF had until December 2015 instructed law firms to register 1,225 mortgages worth N$647million and this has brought the total Home loan value to date to N$704million,” the fund told Prime Focus Magazine through an email correspondence.
The decision by GIPF to bankroll housing development was welcomed by analysts when it was announced as a measure to combat the Namibian housing backlog which currently stands at over 100 000 units. It also came at a time when agitations for affordable accommodation for the medium to low income earning bracket have been growing louder.
Analysts have also opined that the Namibian housing market has somewhat squeezed out locals from acquiring decent houses at a reasonable prize because of exorbitant pricing. Research done in the past has also shown that the housing market in Windhoek is overpriced and outshines other lucrative cities like Cape Town where prices are still within reach for many.
GIPF has taken the decision to invest some of its money locally with a bid to stimulate the domestic economy and also target some of the sectors of the economy that have potential to unlock growth but have been neglected in the past.
In one of the sessions that the GIPF CEO David Nuyoma had with the media this year he stressed that the fund is exploring opportunities of investment in important sectors such as housing, transport and logistics and the water sectors.
“The GIPF has taken a conscious decision to comply with regulatory requirements that require a total exposure in Namibia of 35% which equates to N$ 31.5 billion (as at January 2016 market value of N$ 90 billion). We have further put emphasis on promoting the private equity and unlisted sphere through compliance with Regulation 28 that stipulates an exposure of between 1.75% and 3.5%. This is driven by the need to create more active businesses that would one day qualify to list on the Namibian Stock Exchange,” GIPF stresses.
GIPF also argues that their thought after decision to invest locally could spell good times for pensioners and also have strong bearing on the improvement of social amenities and living standards for Namibians. Ironically, GIPF is the country’s largest pension fund by subscription and also by capitalisation; making them a key component of the Namibian economy.
“Investing locally has benefits; such as job creation, provision of goods and services, as well as improving the standard of living. In addition, investing funds locally allows for diversification of the overall fund, especially against currency fluctuations and other political variables. The overall aim of the Namibian economy is to become a self-reliant system that can trade within itself and externally, if need be,” the Fund states.
GIPF is also required to diversify the investments of assets across different asset classes, both locally and internationally, in order to reduce exposure to the risk posed by a specific asset class, how successful has this been for the past years? Which sectors will the GIPF opt to invest in? Is there a laid down plan to make sure that local
The GIPF Communications team also reiterates that, “One of the Fund’s key focus areas this year is the implementation of the Developmental Investment Policy (DIP) which was approved by the Board. This policy aims to direct capital to commercially viable projects with a strong socio-economic impact within Namibia. These projects should have clear economic, financial and social benefit indicators. For example, consideration could be given to projects in the water sector, but apart from water there are also other infrastructures such as energy, transport and information communication technology (ICT) which are all in line with government’s developmental objectives which could also receive consideration from the Fund.”