By Mohamed Ahmed
The Egyptian Financial Supervisory Authority (EFSA) is currently working on putting in place the internal work regulations for real estate financing companies, EFSA Chairman Sherif Samy told Daily News Egypt.
The move comes after the EFSA recently issued executive regulation modifications for the real estate financing business, aimed at finishing the business’ major regulatory frameworks, Samy said.
The EFSA will also determine the nature of the data in the customer’s account statement, including financial transactions, paid amounts, dues, and payment duration, Samy added.
This will be in addition to determining the methods of collecting the instalments, and the follow-up mechanism.
In mid-September 2014, the EFSA’s Board of Directors approved the draft amendments for the Real Estate Financing Law’s executive regulations, following amendments for the same law issued by the president at the beginning of last July.
“The importance of the internal regulations that the EFSA is working on comes from amendments included in the executive regulations, as they added new funding formulas, like the system of ‘Ijara’, and the system of paying the usufruct, in addition to funding in accordance to the system of participation or ‘Murabaha’,” Samy said.
The Ijara system depends on the company conducting a leasing contract, combined with a promise from the renting party to allow the leaseholder to own the unit at the end of or during the rental period. As for the system of participation (or Murabaha), it depends on the body funding the deal purchasing the unit for a price known in advance for the purpose of selling it to the investor for that price, with a further pre-agreed profit mentioned in the contract that is added to the price.
According to Samy, the EFSA will finalise the internal rules it is working on within days.
The Egyptian Real Estate Financing Federation is specialised in unifying the efforts of the real estate financing bodies, and coordinating between them to develop the business.
The Federation includes in its membership all the real estate financing and refinancing companies subject to the provisions of the law. Several further bodies have the right to join as members of the Federation, including sector-related banks, the Mortgage Finance Subsidy and Guarantee fund, the New Urban Communities Authority (NUCA), groups representing real estate agents, real estate evaluation experts, and real estate brokers. This is in addition to other parties related to the real estate development business, in accordance to the decisions of the EFSA’s Board of Directors.
