The Social Housing and Mortgage Finance Fund (MFF) reported that banks and companies invested EGP 62.29bn in the low-income mortgage financing initiative by the end of August 2023, benefiting about 527,303 customers.
The initiative, launched by the Central Bank of Egypt (CBE) in February 2014, offers long-term loans of up to 30 years with a subsidized interest rate ranging from 5 to 7% for the low- and middle-income segments. The MFF provides housing units for the low-income segment and sets their price according to construction costs.
In 2021, President Abdel Fattah Al-Sisi directed CBE to launch a new programme for the same target groups with a lower and simplified interest rate below 3%.
In November 2022, Prime Minister Mostafa Madbouly issued a decision to transfer the management and supervision of all existing initiatives with returns lower than market prices from CBE to the Ministry of Finance. The decision also included other initiatives related to tourism, vehicle replacement, and modern irrigation.
According to the Fund’s report, banks accounted for 96.2% of the total financing, with EGP 59.943bn directed to about 508,124 customers. The National Bank of Egypt (NBE) topped the list of participating banks with EGP 16.589bn for 140,547 customers, followed by Banque Misr with EGP 15.156bn for 122,842 customers, and the Housing and Development Bank (HDB) with EGP 6.902bn for 71,652 customers.
Companies accounted for 3.8% of the total financing, with EGP 2.35bn directed to nearly 19,179 customers. Contact Mortgage was the leading company in this activity with EGP 838.728m for 6,167 customers.
The PM decision stipulated that EGP 100bn be allocated for the mortgage financing initiative for low- and middle-income people, at an interest rate of 3%. The Ministry of Housing, Utilities, and Urban Communities will compensate the participating banks for the difference in the interest rate.