Faisal Islamic offers 3 proposals to activate central bank’s mortgage initiative

Faisal Islamic Bank of Egypt is offering the country’s central bank three proposals to activate the mortgage finance initiative for the low and medium-class incomes.

Mahmoud Idris – Faisal Bank’s Product Manager for Mortgage Unit – told Amwal Al Ghad Monday that one of the three proposals offered by the bank to the CBE is to raise premiums of the housing unit gradually every year.

Such proposal can significantly contribute to seeing higher number of clients able to maximise the CBE’s social housing initiative, Idris said.

Faisal Bank suggests the raise would account for 15 percent every five years; equivalent to 3 percent annually, he added.

The banking official also said the raise in the annual premiums aims to reduce the value of unit’s down payment to encourage more clients to participate in the initiative.

The second suggestion is to elongate the funding period from 20 to 25 years.

Idris stated that the third proposal is to launch a national campaign by the CBE in coordination with banks to raise citizens’ awareness about the importance of the initiative and the necessary steps to participate in it.

Faisal Islamic Bank of Egypt is negotiating with four real estate development companies to fund medium-class housing units.

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.