Engineer Khaled Sheta, Chairman of IGI Holding and Secretary General of the “The Investor.. Real Estate” conference, said that the real estate sector represents about 20% of Egypt’s total GDP and is a major driver for more than 100 industries directly and indirectly, which makes overcoming the obstacles that stand in its way an “obligation”, especially financing.

He added, in the opening session of the “The Investor.. Real Estate” conference organized by Black Diamond under the slogan “Non-banking financial institutions.. Financing tributaries for urban development”, that the non-banking financial sector is no less important than the real estate sector, as it represents 9.8% of the nominal GDP and 7.7% of the total assets of the financial system.

Follow-up: Last year witnessed a significant development in the performance of the activities of the non-banking financial sector, with it adopting more flexibility and rapid response to confront the increasing changes in the economy in general, but these rates are still less than expectations regarding an important and diverse sector that includes the stock market, insurance, real estate financing, consumer financing, financial leasing, factoring and securitization, and financing small and medium-sized projects.

He stressed the need for real estate companies to benefit from non-banking financing tools, especially small and medium-sized companies, especially with the rise in interest rates that create a large financing gap for companies, which ultimately contributes to encouraging companies to finance their future expansions at a lower cost and enhances their competitiveness and is ultimately reflected in urban development in Egypt.

He explained that economic systems have moved globally to create alternative means of banking financing by pumping more cash, and this was accompanied by the intensive use of financial technology, which in turn helped in providing and developing non-banking financial tools in an effective and influential manner, as financial leasing and real estate financing have become among the first means of providing financing for real estate assets for companies and heavy equipment globally. In the United States, for example, 80% of companies purchase equipment through the use of financial leasing to increase Equipment leasing contracts increased from $700 billion in 2008 to $941 billion last year, and in Germany, leasing contributes 50% of SME financing for equipment.

He stressed that the Egyptian economy at the current stage is in dire need of implementing various financing mechanisms to drive production and enhance the role of the private sector in light of Egypt's Vision 2030, and the targets for developing the non-banking financial services market during the period from 2022 to 2026 include raising the value of the targeted capital in 2026 to 1.6 trillion pounds compared to 766 billion in 2021, and in the case of offering the Administrative Capital Company and government companies.

The market capital value is expected to increase to reach 2.6 trillion pounds, and real estate can play a major role in achieving these targets and even exceeding them by encouraging real estate companies to offer on the stock exchange, provided that the appropriate timing for the offerings is chosen, and from these starting points comes our conference today "Financial Institutions.. Required Financing Tributaries for Urban Development".