Proposal to provide mortgage for under-construction units stimulates local market, but needs Egypt’s CBE support

Proposal to provide mortgage for under-construction units stimulates local market, but needs Egypt’s CBE support

Egypt’s Financial Regulatory Authority (FRA) held a meeting last week of the Mortgage Finance Advisory Committee to discuss proposals for developing the mortgage finance system, overcoming any obstacles facing it, and increasing mortgage finance companies.

The value of finance provided by mortgage finance companies amounted to EGP 8.1bn in 2021, and reached nearly EGP 4bn in the first quarter of the current year. The Committee targets mortgage finance in Egypt to reach approximately EGP 16bn by 2026.

Chairperson of the FRA Mohamed Omran stated that the meeting has discussed proposals submitted by the Real Estate Development Chamber at the Federation of Egyptian Industries and the Egyptian Mortgage Federation. It was agreed to raise a number of recommendations to be presented to the board of directors of the authority in its first meeting, as soon as it was formed, to consider its approval. These recommendations include considering the housing unit as a guarantor of the mortgage, and cancelling the 40% installment limit of income.

Omran added that demands of real estate developers have been met with regard to providing financing for housing units under construction as long as the provisions of mortgage finance law and its executive regulations allow financing of units under construction