CAIRO: Prime Minister Ibrahim Mahlab showed great interest in the Central Bank of Egypt’s (CBE) initiative in February by offering 10 billion EGP ($1.4 billion) to banks to stimulate the mortgage sector, a senior banking official told Youm7 Tuesday.
All competent bodies should collaborate to implement the CBE initiative to offer housing units for low and average-income families, the source said.
Through the new initiative, CBE would lend banks operating in Egypt 10 billion EGP for 20 years lent to people of low-income and average-income at a 7 and 8 percent interest, respectively, to buy housing units in new urban communities.
CBE called on Egyptian banks to start the initiative, that it would be a strong incentive for economic growth. The banks recently received the executive draft of the initiative.
The banks are expected to launch the mortgage offers during the next few days, according to the conditions determined by CBE.
“This initiative will promote the real estate sector and related industries, in addition to offering a wide range of citizens the chance to purchase housing units in the new urban communities,” chairman of the Egyptian Financial Supervisory Authority Sherif Sami told Youm7.
Sami said that mortgage companies could also benefit from this initiative, since CBE allowed banks to direct some of the allocated money to these companies, provided that they are committed to the prices and terms of lending determined in the initiative.
Head of the Mortgage Finance Fund Mai Abdel Hamid welcomed the initiative of the Central Bank.
The market is expected to double twice in two years due to CBE’s initiative, aimed to promote the mortgage sector, Abdel Hamid said during the ‘Regulatory Reform of Non-Banking Financial Services’ conference in Cairo on Feb. 25.
The mortgage and real estate sector face many challenges in the domestic market, with the majority of approximately 30 million real estate units in Egypt not listed in the real estate notary office, MFF’s chairman noted. The mortgage fund is pushing for applying a project for registration of real estate properties.
Additional reporting by Ahmed Yaaqob.