Chairperson of the Financial Regulatory Authority (FRA) Mohamed Farid has increased the value of mortgage finance installment to 50% of the total income instead of 35-40%, in an effort to increase the base of beneficiaries.
The decision came in recognition of various economic variables, especially higher inflation, which required changing the rules regulating non-banking financial activities to ensure the continuity of its important role in helping individuals and institutions meet their financing and investment needs.
Farid said that the amendment included an increase in the value of mortgage financing installment to reach 50% of the customer’s total income to increase credit limit, which gives greater flexibility to obtain appropriate financing for owning a housing unit. Moreover, this amendment represents an interaction with economic changes in markets to counter the effects of high rate of inflation. The Authority aims to provide financing for middle-income people within the framework of the state’s plan for financial inclusion.
Farid noted that the FRA is constantly working to find appropriate solutions and alternatives to improve the level of efficiency and competitiveness of non-banking financial markets, including the mortgage finance industry. The Authority is keen to hold technical discussions with all entities subject to its supervision in order to review opportunities, challenges and developments facing all relevant parties with the aim of taking necessary procedures and issuing amendments and controls that help ensure the continuity of the growth of the market.
Mortgage financing granted by companies amounted to EGP 4.2bn in the third quarter of 2022, with a growth rate of 71.5% compared to the same period last year.
