Egypt - Beltone Mortgage, affiliated to Beltone Holding, one of the fastest-growing financial institutions, has provided mortgage loans worth EGP 2.6bn in the first half (H1) of this year, directed towards approximately 1,500 clients. The funding is distributed as 59% in portfolios and 41% in individual loans, with a cumulative portfolio size of around EGP 3.8bn, according to Hassan Abdelnabi, CEO of Beltone Mortgage.

Abdelnabi told Daily News Egypt that the company has provided financing for Egyptian expatriates, which represents 10% of Beltone’s total funding, and noted that the company aims to enhance its financing for foreigners residing in Egypt.

He added that the company aims to increase individual financing to 50% of total loans by 2025 and attract new client segments to reach 2,000 clients.

He pointed out that the average value of units in the portfolio ranges between EGP 11m and EGP 12m. The company primarily works with initial units, and the maximum financing amount for a single client can reach EGP 180m, depending on the type of unit and the client’s financial capacity.

Abdelnabi further stated that the company aims to issue securitization bonds by 2025 and confirmed that there are currently no delinquency rates at the company.

Regarding cooperation with banks, he pointed out that the company has secured credit facilities amounting to EGP 3bn from 9 banks and aims to collaborate with 5 new banks next month to obtain additional credit facilities. The goal is to increase the number of cooperating banks to 20 by the end of 2024.

The company’s CEO believed that the real estate sector in Egypt is poised for a surge in property prices shortly, anticipating a potential increase of around 20% in property prices if the exchange rate of the Egyptian pound remains stable against the US dollar at current levels.

He disclosed that the significant price increases observed in Egypt’s real estate market recently were attempts by the market to adjust to the fluctuations in the exchange rate of the pound against the dollar over the past two years. Accordingly, the increase in property prices has led to a rise in demand for mortgage financing services.

Regarding the impact of rising interest rates, Abdelnabi further explained that the higher rates have negatively affected most sectors, including mortgage financing. This has led to increased financing costs for clients and a heavier financial burden.

He added that this underscores the importance of thoroughly assessing clients and verifying their documentation and financial stability before approving loans. Despite challenges and higher interest rates, the sector has seen new companies entering the market recently to address all customer needs.

He stated, “The company offers repayment terms ranging from 1 to 8 years, with options extending to 10 years by next month and potentially up to 15 years by the end of the year, with a 20% down payment. This contrasts with developers who typically offer a maximum repayment period of 4 years for ready units. This advantage of mortgage financing helps clients purchase property while maintaining their liquidity.”

According to Abdelnabi, mortgage portfolios account for 59% of the company’s total portfolio, with the remaining share allocated to individual clients. The company aims to increase the share of individual financing to 50% as one of its main goals.

The company offers financing for various regions and governorates, from Upper Egypt to the North Coast, Sokhna, and Cairo, with no minimum limit on the loan amount and a maximum of EGP 180m,” he indicated. “Moreover, the company operates in areas like the North Coast and the Red Sea, including El Gouna, Hurghada, as well as Minya, Assiut, and Sohag.

He highlighted that the role of mortgage financing comes after the client selects their residential unit, clarified that while high-interest rates might seem like a barrier, they are still lower than or equivalent to the immediate discount offered by developers for cash sales or ready units, which can exceed 45%.

Beltone Mortgage aims to maintain a 25% market share in the Egyptian market by the end of this year, coinciding with plans for geographic expansion and entry into regional markets.

Beltone Mortgage obtained final approval from the Financial Regulatory Authority (FRA) in the last quarter of 2023. Both the company’s authorized and paid-up capital amount to EGP 1bn. The company offers financing services for purchasing residential, commercial, and administrative units through an Ijara (leasing) system with an option to own.

According to the FRA, the total mortgage financing granted by companies in the first quarter of 2024 amounted to EGP 5.3bn, marking a growth rate of 140.4% compared to the same period in 2023. Meanwhile, the total value of refinancing reached EGP 1.1bn, reflecting a growth rate of 262%. The number of mortgage financing contracts reached 3,019, showing a growth rate of 129%.

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