April 22, 2024

Banks provide EGP 63.729bn for low-income mortgage finance initiative in 2023

The Social Housing and Mortgage Finance Fund reported that banks provided EGP 63.729bn to 529,520 customers as part of the low-income real estate financing initiative in 2023.

According to a recent report by the Fund, NBE topped the banks participating in that initiative with a share of 26.1%, as it provided financing worth EGP 17.254bn to 144,322 clients.

Banque Misr came in second with a volume of financing of EGP 15.918bn to 127,871 customers, with a share of 24.1%. It was followed by the Housing and Development Bank with the financing of EGP 7.171bn to 73,037 customers, a share of 10.8%, then Banque du Caire with the financing of EGP 5.130bn to 45,348 customers, with a share of 7.8%.

The Fund also revealed that real estate financing companies provided EGP 2.366bn to about 19,246 customers, accounting for 2.3% of the total financing provided within this initiative.

The Fund indicated that Al-Tameer Real Estate Finance Company led the companies participating in this initiative with financing of EGP 846.965m to 6,884 customers, while Contact Real Estate Finance Company provided financing of EGP 838.728m to 6,167 customers, and Al-Ahly Real Estate Finance Company provided financing of EGP 284.307m to about 2,535 customers.

The volume of financing provided by Amlak Real Estate Finance Company amounted to EGP 252.133m to 2,320 customers, while Tamweel provided EGP 68.666m to 602 clients.

CBE Egypt launched a real estate financing initiative with a subsidized decreasing interest rate for the low- and middle-income segments in February 2014, with an interest rate ranging between 5 and 7%.

In 2021, President Abdel Fattah Al-Sisi directed CBE to develop and launch a new real estate financing program for low- and middle-income groups to help them own housing units, through long-term loans of up to 30 years with a low and simplified interest rate not exceeding 3%. In November 2022, Prime Minister Mostafa Madbouly issued a decision to assign the Ministry of Finance to manage and follow up on all existing initiatives with returns that are lower than market prices instead of CBE.

The decision included two real estate financing initiatives for low- and middle-income people, a tourism support initiative, a vehicle replacement initiative, and a modern irrigation initiative. This involved making decisions and determining the controls related to these initiatives, in terms of identifying beneficiaries, cost, time frame, and the entity that will undertake the executive management of each initiative.

The decision stipulated that the Ministry of Housing, Utilities and Urban Communities will bear the cost of compensating the banks for the difference in the interest rate for the real estate financing initiative for low- and middle-income people, which has an allocation of EGP 100bn at an interest rate of 3%.

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