Egypt’s banks pumped US$225mn among CBE’s mortgage initiative in 2 years

Egypt’s local banks injected 2 billion Egyptian pounds (US$225 million) in favour of the central bank’s low-income mortgage initiative by the end of March 2016, Mortgage Finance Fund (MFF) chairman May Abdel Hamid said Monday.

Abdel Hamid told Amwal Al Ghad that MFF has pumped 500 million Egyptian pounds among CBE’s mortgage initiative.

During 2014, CBE has launched an initiative worth 10 billion Egyptian pounds (US$1.4 billion) to stimulate the mortgage sector and finance the purchase of housing for earners with low and average incomes.

In March 2014, four local Egyptian banks, namely the National Bank of Egypt, Banque Du Caire, Banque Misr and Housing and Development Bank, have signed agreements with MFF worth 8.5 billion Egyptian pounds to finance low and average incomes’ earners at annual interest rate between 8 percent and 7 percent.

CBE has amended the mortgage finance initiative to provide an opportunity for those who earn less than EGP 1,400 per month to benefit from the initiative at a discounted annual interest rate of 5% instead of 7%.

Moreover, the new amendments has introduced a new segment under the name of “privileged average income”, which aims to open the way for youth wishing to acquire housing through mortgage finance initiatives.

CBE has explained that the rate of return for this funding will be higher than that of other groups benefiting from the initiative, as it will reach an annual discount rate of 10.5%, provided that the maximum monthly income does not exceed EGP 15,000 per person and EGP 20,000 per family. Another condition is that the maximum price of the financed unit for that category should not exceed EGP 950,000.