Five banks account for 74.2% of mortgage finance for low-income sector in Q1 2024

Hossam Mounir
4 Min Read

Five banks were responsible for 74.2% of the total mortgage finance provided to the low-income sector in the first quarter of 2024. These banks distributed EGP 51.054bn in loans to approximately 425,800 customers. This figure is part of a larger sum of EGP 66.448bn that was extended by 22 banks to around 544,626 customers under the initiative.

The National Bank of Egypt (NBE) led the pack, offering EGP 17.814bn in financing to 147,332 customers, representing 25.9% of the total initiative. Banque Misr followed closely, with loans totalling EGP 16.576bn to 132,046 customers, accounting for 24.1% of the initiative.

Housing and Development Bank (HDB) secured the third spot by providing EGP 7.303bn to 73,718 customers, making up 10.6% of the initiative’s funds. Banque du Caire followed with an 8.1% contribution, extending EGP 5.575bn to 47,840 customers. In fifth place, QNB Alahli granted EGP 3.786bn in loans to 24,864 customers, which is 5.5% of the initiative’s total.

The Cabinet, under the leadership of Prime Minister Mostafa Madbouly, approved amendments to the Mortgage Finance Law’s executive regulations on Wednesday. These changes are designed to adapt to the dynamic economic environment domestically and internationally. The amendments address the increased costs of construction materials and production inputs in the real estate sector, which have led to higher property values. Consequently, the financial threshold for real estate financing companies has been raised, doubling the minimum capital requirement from EGP 50m to EGP 100m.

Companies now have up to one year from the implementation date of the decision to comply with the new capital requirements, with the possibility of an extension of up to two years by the Financial Regulatory Authority (FRA).

The revisions also streamline the process for financial entities to reclaim outstanding debts from clients who fail to meet their contractual obligations. If clients fall behind on payments, they will receive a notice 30 days after the missed payment date. They then have 60 days to settle their debt. Failure to do so will result in the FRA appointing a real estate agent to oversee the sale of the property, under the guidance of an execution judge.

The property’s market value will be appraised by two registered experts, and it must be sold for the highest price possible, considering the appraisals and ensuring the financier recovers the owed amount, along with any accrued penalties and costs, up to the sale date. Any surplus from the sale will be refunded to the property owner.

Eight firms are involved in the mortgage finance initiative for the low-income bracket, contributing EGP 2.405bn to approximately 19,397 customers by March 2024, which is 2.2% of the initiative’s total financing, according to the Social Housing and Mortgage Finance Fund.

Al Tameer Mortgage Finance leads these companies with a loan volume of about EGP 885.819m to 7,034 customers. Contact Mortgage follows with EGP 838.728m to 6,167 customers, and Al Ahly Mortgage Finance has provided EGP 284.436m to roughly 2,536 customers.

Amlak Finance has extended EGP 252.133m to 2,320 customers, while Tamweel has disbursed EGP 68.666m to 602 customers.

Lastly, the Egyptian Housing Finance Company (EHFC) has contributed EGP 43.042m to 429 clients, Ahli United has financed EGP 19.973m to 200 clients, and the Arab African International Company has allocated EGP 12.211m to 109 clients.

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