May Abdel Hamid, chairperson of Mortgage Finance Fund (MFF), said “the total number of beneficiaries from the Central Bank of Egypt’s (CBE) mortgage finance initiative has reached 230,000 people, including low-income and middle-income housing projects.
Abdel Hamid added that the MFF has faced several challenges, notably the lack of a mortgage finance culture among citizens.
During the Cityscape Egypt conference launched on Sunday, Abdel Hamid noted that there are 20 banks and six mortgage companies working under the initiative and have a strong experience to deal with customer requests to get a unit within the social housing project.
She pointed out that it was agreed with the ministry of finance to continue to support the low-income housing within the CBE’s initiative for mortgage finance, while the finance for middle-income housing has ended.
Additionally, she expected another cut in the CBE’s interest rate, which would enable the middle-income people to obtain a unit, especially after the tendency of developers to decrease units’ sizes commensurate with their financial abilities.
Furthermore, Abdel Hamid pointed out that the enactment of the real estate market regulation law and the launching of a real estate developers’ federation is a new stage that will benefit the real estate development industry, in addition to the classification of developers which will enable each developer to evolve the land commensurate with his financial and technical capabilities.
Ahmed Shalaby, CEO and managing director of Tatweer Misr, said that Egypt’s real estate market is one of the most important markets supporting the Egyptian economy, which enjoys increasing growth rates, but it faces the challenge of the stability of customers’ purchasing power against high prices, pointing out the importance of mortgage finance to support the entire development of the real estate sector.
Shalaby noted that the state plan to double urban areas will not be completed as quickly as required according to the current form of the real estate development system and the absence of the mortgage finance system.
He elaborated that Egypt is on the brink of a new phase in local development through the inauguration of many new urban communities and at the global level through the expansion of Egypt’s property export, which will not be done without mortgage finance.
Therefore, he called on the state to launch a database containing a map of supply and demand in each new city, which will direct developers to invest in areas where there is a shortage of supply.
Furthermore, he stressed that real estate companies need to focus on the implementation of non-residential and service real estate projects that are the nucleus of attracting the population to be present in new urban communities and cities and create an opportunity to attract foreign investment funds to be present in those projects, so mortgage financing is an opportunity to achieve this goal.
CEO of Retail Banking and a member of the board’s executive committee at Commercial International Bank (CIB), Ahmed Issa, said, “the state’s keenness to support banks’ guidance in supporting mortgage finance requires the regulation of mortgage finance and the identification of mechanisms and guarantees in line with the strategies of banking institutions.”
Issa added that the CBE’s initiative to support mortgage finance has succeeded in supporting banks during the last period in directing good shares of their financing toward the mortgage system despite the existence of some obstacles, noting that the creditworthiness of the real estate industry encourages banks to expand the financing activities of the sector.
He also pointed out that the strategy of the CIB focuses on enhancing financing provided to individuals and companies. The bank’s personal finance portfolio is estimated at EGP 25bn and the bank is keen to achieve a growth in the finance portfolio.
Finally, he explained that real estate industry needs to be restructured locally to provide greater opportunities for mortgage finance by providing suitable housing products to customers.