Egypt - Banks and finance companies participating in the mortgage finance initiative for low-income people pumped financing worth EGP 75.62bn to more than 594,380 customers until September 2024.

A Mortgage Finance Fund report revealed that the 22 banks participating in the initiative pumped about EGP 73.11bn into it, benefiting about 574,588 customers, equivalent to 96.7% of the total initiative.

Mortgage finance companies pumped EGP 2.511bn in financing, benefiting about 19,792 clients, accounting for 3.3%.

The Central Bank of Egypt launched a mortgage finance initiative in February 2014. The initiative offers subsidized, decreasing interest for low—and middle-income groups, with an interest rate ranging from 5% to 7%. The Mortgage Finance Fund provides housing units for low-income groups and determines the price of the housing unit according to its construction costs.

In 2021, President Abdel Fattah Al-Sisi directed the Central Bank of Egypt (CBE) to develop and launch a new mortgage finance program for low- and middle-income groups to support their ability to own housing units, through long-term loans of up to 30 years and a low and simplified interest rate not exceeding 3%.

The initiative’s affiliation

In November 2022, Prime Minister Mostafa Madbouly issued a decision assigning the Ministry of Finance to manage and follow up on all existing initiatives with a return lower than market prices instead of the Central Bank.

The initiatives covered by the decision included the real estate financing initiative for low- and middle-income people, the tourism support initiative, the vehicle replacement initiative, and the modern irrigation initiative. This includes the decision-making process and determining the controls related to these initiatives in terms of identifying the beneficiaries, cost, and time frame, the entity that will assume the executive management of each initiative, the source of funding for the initiative, and the entity that will bear the cost. The decision stipulated that for the real estate financing initiative for low- and middle-income people, for which EGP 100bn was allocated at 3% interest, the Ministry of Housing, Utilities and Urban Communities will bear the cost of compensating the banks for the difference in the return rate.

NBE leads the initiative

According to a report by the Mortgage Finance Fund, the National Bank of Egypt (NBE) led the banks participating in the real estate financing initiative for low-income people. Its financing volume of EGP 18.971bn for 153,169 customers accounted for 25.1% of the initiative.

Banque Misr came in second place with financing amounting to EGP 17.831bn and a percentage of 23.6% for 138,888 customers. The Housing and Development Bank (HDB) came in third place with financing amounting to EGP 7.567bn and 74,763 customers, with a percentage of 10%. In fourth place came Banque du Caire with a percentage of 9.3% with financing amounting to EGP 6.995bn for about 53,835 customers. In fifth place came QNB Bank with a share of 6.3% and financing amounting to EGP 4.762bn for 28,787 customers. In sixth place came the Commercial International Bank (CIB) with 27,400 customers with financing amounting to EGP 4.021bn and a percentage of 5.3%. In seventh place came the United Bank with a share of 2.6% and financing amounting to EGP 1.994bn for 14,502 customers. The Industrial Development Bank (IDB) came in eighth place with a share of 2.6% and financing of EGP 1.982bn for 17,704 clients, followed by the Arab Investment Bank with a share of 1.7% and financing of EGP 1.323bn for 8,584 clients, then the Arab African International Bank with a share of 1.7% and financing of EGP 1.298bn for 10,677 clients.

Mortgage finance companies

The fund revealed that Al-Taamir Mortgage Finance topped the companies participating in the real estate financing initiative for low-income people in September 2024 with a portfolio of EGP 991.932m for 7,429 clients, accounting for 1.3% of the total initiative.

According to the fund, Contact Mortgage came in second place among the companies participating in this initiative with a portfolio of EGP 838.7m for 6,167 clients, with a share of 1.1%.

Al-Ahly Mortgage Finance came in third place with a portfolio of EGP 284.436 million for 2,536 clients and a share of 0.4%, followed by Amlak Mortgage Finance with a portfolio of EGP 252.133m for 2,320 clients and a share of 0.3%.

In fifth place came Tamweel Mortgage Finance, with financing amounting to EGP 68.6m for about 602 clients and a share of 0.1%. The Egyptian Mortgage Finance Company came next with a value of EGP 43.042m for 429 clients and a share of 0.1%. Al-Ahly United came next with a value of EGP 19.97m for about 200 clients. Finally, the Arab African International Mortgage Finance came last with a value of EGP 12.2m for about 109 clients.

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