Faisal Islamic Bank in talks to finance medium-class housing units

Faisal Islamic Bank of Egypt is currently negotiating with four real estate investment firms to take part in the central bank’s social housing initiative, Product Manager-Mortgage Unit Mahmoud Idris said Monday.

Speaking to Amwal Al Ghad, Idris stated that the bank is to sign a protocol with one of those companies this week. He refused to reveal the names of the four firms before finishing the agreements.

In 2014, Egypt’s Central Bank (CBE) has launched new initiative worth 10 billion Egyptian pounds (US$1.4 billion) to stimulate the mortgage sector.

Through the new initiative, CBE would lend Egypt’s working banks 10 billion Egyptian pounds for 20 years to be lent to people of low-income and average-income at 7 and 8 percent interest, respectively, in order to buy housing units in new urban communities.

In December 2014, CBE decided to double its mortgage initiative to 20 billion pounds by 2015.

Faisal Islamic Bank has got the approval of New Urban Communities Authority (NUCA) to finance low-income units among CBE’s initiative according to Murabaha mechanism approved by the bank, Idris added.

He clarified that the bank is to start the activation of a protocol signed with Mortgage Finance Fund (MFF) this week. The protocol aims at financing low-income units with around 200 million Egyptian pounds.

The official expected that the bank is to receive a massive number of applications after activating this protocol.