Renthia Kaimbi
The Financial Institutions and Markets Act (FIMA), designed to protect retirement savings, may be unintentionally shutting out thousands of ordinary Namibians from accessing affordable housing finance through their pension funds.
However, the Government Institutions Pension Fund (GIPF) has moved to assure its members that its housing loan schemes remain fully operational and unaffected by the new restrictions.
Speaking to the Windhoek Observer, Vincent Shimutwikeni, a retirement funds author and pension industry professional, raised concerns that Section 282(2) of FIMA, which came into effect on 1 May 2026, imposes a first mortgage bond requirement that could render housing loans inaccessible to many members who previously qualified under the repealed Pension Funds Act No 24 of 1956.
The requirement, which was emphasised in a circular issued by the Retirement Fund Service (RFS) on 10 July 2026 and seen by the Windhoek Observer, mandates that any direct housing loan granted by a retirement fund must be secured by a first mortgage bond registered over the relevant immovable property.
The only exception is where a fund obtains an exemption from the Namibia Financial Institutions Supervisory Authority (NAMFISA) under Section 282(3).
Shimutwikeni acknowledged that the protection of retirement savings is a legitimate and necessary objective.
“Few would disagree with the objective of ensuring that members’ retirement savings are properly safeguarded,” he said.
However, he questioned whether the requirement strikes the appropriate balance between protecting retirement savings and advancing the government’s broader housing objectives.
Under the previous legislative framework, the Pension Funds Act allowed retirement funds to grant housing loans without requiring a first mortgage bond.
Instead, the law relied on a combination of statutory safeguards, trustee oversight, salary deductions, and the ability to recover outstanding balances from members’ final pension payouts upon resignation, retirement, or withdrawal.
“This was not an oversight,” Shimutwikeni said. “Rather, the Pension Funds Act adopted a practical approach to balancing the protection of retirement savings with the need to promote home ownership.”
The practical implications of the new requirement, Shimutwikeni argues, become apparent when considering the realities of property ownership in Namibia.
He said many Namibians reside on communal land under customary land rights or occupy land through long-term leasehold arrangements.
While these members may have secure occupation rights, stable employment, and substantial retirement savings, they often do not possess registered ownership capable of supporting a first mortgage bond.
“Under the previous legislative framework, these members could still qualify for a direct housing loan, subject to their fund’s rules and the safeguards provided by the Pension Funds Act,” Shimutwikeni said
“Under FIMA, they may now find themselves excluded from accessing that same assistance simply because the required form of security cannot be created.”
A similar difficulty, he stated, arises for members who already own homes financed through commercial banks. In most cases, the bank already holds the first mortgage bond over the property.
Should such a member wish to access an affordable direct housing loan from their retirement fund to extend, renovate, or improve their dwelling, the fund is unable to register a first mortgage bond because one already exists in favour of the bank.
“Consequently, members who would previously have qualified for relatively affordable housing finance through their retirement fund may now have no practical access to it,” Shimutwikeni said.
Shimutwikeni pointed to what he described as an unintended contradiction in public policy. On one hand, he said the government has deliberately reduced the prescribed interest rate applicable to direct housing loans from the repo rate plus 4% to the repo rate plus 2.5% in order to make them more affordable.
On the other hand, FIMA Section 282(2) introduces a legal requirement that may make those same loans inaccessible to many of the members they were intended to benefit.
“Affordability and accessibility cannot be separated,” he said. “A loan that is inexpensive but impossible to obtain provides little practical benefit.”
In the circular, RFS, which administers housing loans on behalf of participating funds, announced that it will not process any new direct housing loan that fails to meet the first mortgage bond requirement unless it receives a copy of a NAMFISA exemption granted to the relevant fund.
Where such an exemption has been granted, RFS has stated that it will administer the housing loan strictly in accordance with the terms and conditions of that exemption.
When approached for comment, GIPF confirmed that it is fully aware of the requirement under Section 282 of FIMA.
Edwin Tjiramba, chief of corporate communications and stakeholders management at GIPF, clarified that the requirement is not entirely new.
“It is important to clarify that this requirement is not new, as a similar provision also existed under Section 19(5)(b) of the previous legal framework governing pension funds, the Pension Funds Act No 24 of 1956,” Tjiramba said.
He added that the first mortgage security has always been a requirement that GIPF applied in its Mortgage-Backed Home Loan Scheme.
Crucially, Tjiramba noted that GIPF operates two distinct housing loan schemes, and only one is affected by the new provision.
“The recently implemented GIPF Pension-Backed Home Loan Scheme does not use mortgage bonds as security; therefore, it is not affected by the requirement or limitation referred to in this section of the law,” he said.
“Under the GIPF Pension-Backed Home Loan Scheme, the member’s pension itself serves as the security and not the first mortgage bond.”
Tjiramba assured that both GIPF home loan schemes remain aligned with the applicable legal and regulatory framework, and that applications under the schemes will continue to be considered as usual.
The GIPF’s response highlights a critical distinction in how different retirement funds structure their housing loan products.
Funds that rely on pension-backed security rather than mortgage bonds may remain unaffected by the FIMA restrictions, while those offering traditional mortgage-backed loans must comply with the first mortgage bond requirement.
Boards of trustees across all RFS-managed funds have been urged to review their housing loan arrangements and ensure that any new loans comply with the law.
Funds that have already obtained exemptions from NAMFISA are required to provide copies to RFS to enable the administrator to process the loans accordingly.
Shimutwikeni suggested that the question of whether a first mortgage bond should now be the only acceptable form of security deserves careful consideration, particularly in a country where many forms of lawful land tenure do not readily accommodate mortgage registration.
“As Namibia continues to pursue its national housing agenda, it may be worthwhile for policymakers and regulators to revisit whether Section 282(2) has struck the appropriate balance,” Shimutwikeni said.
“The objective should not be to weaken the protection afforded to retirement savings, but rather to ensure that the law also recognises the realities facing ordinary Namibians who seek nothing more than to use a portion of their own retirement savings to acquire or improve a home.”
He further reflected on the broader purpose of retirement funds. “Retirement funds exist to provide financial security in old age. Yet financial security begins long before retirement. It begins with the security of having a place to call home. If the law unintentionally places that aspiration beyond the reach of many members, then perhaps the time has come to ask whether the balance between prudence and accessibility has shifted just a little too far.”
RFS has assured participating funds of its continued support during the implementation process of FIMA and has pledged to communicate any further legislative, regulatory, or operational developments that may affect the administration of retirement funds.
Funds and their boards have further been encouraged to reach out to their designated RFS client managers should they require any clarification regarding the new housing loan restrictions or the exemption application process.
