Central Bank offers mortgages to help Egypt's middle class
The Central Bank of Egypt has an ambitious plan to provide Egypt's middle class with funding to buy properties.
In what analysts described as a “kiss of life” for Egypt’s property market, the Central Bank of Egypt unveiled a 50-billion-pound ($2.97 billion) mortgage initiative on May 30. It is designed to enable Egypt's middle class to buy property, Sherif Samy, former chairman of the Financial Regulatory Authority, told Al-Monitor.
“This is a continuation of a previous initiative to provide those who cannot afford a mortgage to buy housing,” Samy said, referring to the Central Bank’s 2014 mortgage initiative.
The Central Bank introduced a mortgage finance initiative worth 10 billion pounds ($595 million) in February 2014 at an 8% interest rate for middle-income citizens. In 2015, the bank raised the initiative to 20 billion pounds ($1.19 billion). The loans are repaid at a reducing balance rate, with interest charged on the shrinking principal that reduces with repayment of each loan installment.
“Although mortgage funding is a key instrument for homebuyers, [there are] registration problems. Since a mortgage is an asset-based lending scheme, it is imperative to facilitate the registration of properties in Egypt to enable individuals to have access to the central bank’s mortgage initiative,” Samy said.
