The Social Housing and Mortgage Finance Fund (MFF) reported that banks and companies participating in the affordable housing mortgage initiative have collectively injected EGP 70.6bn, benefiting over 573,000 clients by the end of June 2024.
In a recent statement, the fund highlighted that banks alone contributed EGP 68.17bn in financing to approximately 553,450 clients, accounting for 96.5% of the initiative. Meanwhile, mortgage finance companies contributed EGP 2.5bn, benefiting around 19,500 clients (3.5% of the initiative).
The Central Bank of Egypt (CBE) launched the mortgage finance initiative in February 2014, offering subsidized declining interest rates for low and middle-income segments, with rates ranging from 5% to 7%. The Social Housing and Mortgage Finance Fund provides housing units for the low-income segment, determining unit prices based on construction costs.
In 2021, President Abdel Fattah Al-Sisi directed the CBE to develop and launch a new mortgage finance program to assist low and middle-income groups in acquiring housing units. This program offers long-term loans of up to 30 years with a simplified low interest rate not exceeding 3%.
In November 2022, Prime Minister Mostafa Madbouly assigned the Ministry of Finance to manage and oversee all ongoing initiatives with yields below market rates, previously handled by the Central Bank.
These initiatives include mortgage finance programs for low and middle-income groups, tourism support, vehicle replacement, and modern irrigation. Decision-making processes, regulations, beneficiaries, costs, timelines, and executive management responsibilities fall under this umbrella. The allocated resources and costs for these initiatives will be reflected in the general budget items upon Cabinet approval, based on the Minister of Finance’s presentation.
Regarding the mortgage finance initiative for low and middle-income groups, which allocated EGP 100bn at a 3% interest rate, the Ministry of Housing, Utilities, and Urban Communities will bear the cost of compensating banks for the interest rate differential.
According to the MFF, the National Bank of Egypt (NBE) led the mortgage finance initiative for low-income groups, providing EGP 18.152bn in financing for 149,239 clients (25.7% of the initiative) by the end of June 2024.
Banque Misr ranked second with EGP 16.936bn in financing for 134,320 clients (24% share). The Housing and Development Bank came third with EGP 7.381bn in financing for 74,047 clients (10.5% share).
Banque du Caire secured fourth place, offering EGP 5.86bn in financing for 49,348 clients (8.3%). QNB Alahli followed in fifth place, providing EGP 4.054bn in financing for 26,009 clients (5.7% share).
The Commercial International Bank ranked sixth, contributing EGP 3.471bn in financing for 25,490 clients (4.9% share). The Industrial Development Bank stood seventh, with EGP 1.947bn in financing for 17,507 clients (2.8% share).
The United Bank provided EGP 1.880bn in financing for 14,039 clients (2.7%), while the Arab African International Bank followed with EGP 1.257bn for 10,500 clients (1.8% share). Lastly, the Arab Investment Bank supported 7,913 clients with EGP 1.153bn (1.6% share).
