5.6 billion pounds.. Banks' contribution to the real estate financing initiative

During the last 6 months of this year, banks approved loans amounting to 5.6 billion pounds in the two real estate financing initiatives for the low-income segment, with interest rates of 7% and 3% on a decreasing basis.

According to data issued by the Mortgage Finance Fund, loans provided by banks and companies in the two real estate financing initiatives rose to about 60.1 billion pounds at the end of last June, compared to about 54.5 billion pounds in December 2022.

 Real estate intuitive 

Fund figures show that the increase in loans during the last 6 months came from 22 banks participating in the two real estate financing initiatives, despite the participation of 8 real estate finance companies.

Banks acquire 96.1% of the total financing provided in the real estate financing initiative, amounting to 57.74 billion pounds, for 494,492 clients by the end of June.

While the share of real estate finance companies in the total financing of the initiative amounted to 3.9%, with a volume of financing amounting to 2.333 billion pounds for 19,1.08 clients, according to the fund’s data.

3% interest initiative

Last November, the Council of Ministers announced the transfer of support for the 3% interest initiative for low- and middle-income segments from the Central Bank to the Ministry of Housing and the Urban Communities Authority, as part of 5 initiatives.

The National Bank of Egypt pumped financing of about 16.2 billion pounds in the two real estate financing initiatives for a number of approximately 138,000 customers, with a market share of 26.9%, until the end of last June.

While Banque Misr provided financing of about 14.5 billion pounds to 118,343 customers, with a market share of 24.1%, until the end of last June.

Before the 3% initiative

Before the 3% initiative, the Central Bank allowed in 2014 an initiative for real estate financing for low-income people, with an interest of 7% on a decreasing basis, and the Ministry of Finance is responsible for subsidizing the interest from 2019 after the central bank stopped.

The value of financing provided by banks and companies in the two real estate financing initiatives for the low-income segment increased by the end of June 2023 to about 60.1 billion pounds for 513,600 clients, according to data issued by the Mortgage Finance Fund in11 July 2023.

The share of real estate finance companies in the initiative’s total financing amounted to 3.9%, with a financing volume of EGP 2.333 billion for 19,108 clients, according to the fund’s data.

Al-Ahly and Bank of Egypt acquire half of the funds provided in the real estate financing initiative at the level of banks and companies, as they contributed 50% of the total loans provided in the two initiatives until the end of last month, according to the data of the Mortgage Finance Fund.