The United Bank has joined the Central Bank of Egypt in a scheme that aims to boost Egypt’s economy and real estate market by refinancing mortgage customers at discounted prices.
According to Reuters, the central bank said Tuesday it would allocate EGP 10bn ($1.44bn) for low-cost housing projects. The money will be deposited to banks, such as The United Bank, for 20 years at a low interest rate. The banks will lend the money to citizens who qualify to buy houses at a yearly interest rate of 7% to 8%.
United Bank Chairman Mohamed Ashmawy said the Central Bank of Egypt initiative represents a “great starting point” for the real estate market and for more than 35 other related small and medium industries across Egypt’s governorates.
The initiative, Ashmawy said, will have positive effects on the economy by decreasing inflation rates, moving the market and generating liquidity. The scheme is expected to increase revenues by EGP 60bn or EGP 70bn
Ashmawy said the initiative would also contribute to easing the problem of unemployment and create an incentive for developers to speed the completion of their work.
Ashmawy said the most important goal of the initiative would be to support low- and middle- income citizens and ease the pressure on slums that surround most governorates.
The cabinet, meanwhile, is considering legal amendments to facilitate mortgages, especially in new cities.
Translated from Al Borsa newspaper