Saleh: lending to reach LE 2.5 billion by year end
CAIRO: Mortgage Finance Authority (MFA) Chairman Osama Saleh said Monday his office is looking to license three more mortgage finance companies by the end of the year, bring the number of specialized lending institutions to seven.
Mortgage financing is now available through three companies that have begun operation in the past two years and one more that has entered the market in the past week. Financing is also available through most major banks, although high lending rates and lack of public awareness have hindered government efforts to activate the 2001 Mortgage Finance Law.
HC Brokerage Housing Analyst Nemat Allah Choucri says MFA and the Ministry of Finance have worked well to remove obstacles facing the industry including lowering property registration fees and real estate taxing. Still, lending rates, now in the 12 percent to 14 percent range, remain high, she says.
Mortgage rates are critically high but with the entrance of more companies and [the Egyptian Company for Mortgage Refinancing], competition is increasing and lenders will find a cheaper way to provide financing, Choucri says.
Despite the difficulties, Saleh said the LE 1 billion in total lending achieved at the end of last year represents a significant achievement relative to the LE 650 million recorded in September, 2006 and the LE 16 million recorded in June, 2005. He added MFA projects lending will reach LE 2.5 billion by the end of 2007.
Saleh had announced earlier in the year MFA projects lending will reach LE 4 billion by the end of 2007. Saleh s office declined to comment to The Daily Star Egypt on the discrepancy Tuesday and, as of press time, Saleh was not available for comment.
Last week, an Egyptian-Gulf consortium led by the United Arab Emirates Amlak Finance began operations with a LE 500 million capital Islamic financing company. The sector also received a boost earlier in the month with the approval of the People s Assembly Housing Committee of a LE 214 million loan from the World Bank to be pumped into the country s mortgage financing sector.
According to the Ministry of Finance, the government will make the funds available to primary lending institutions represented in the four established mortgage finance companies.