In the heart of Egypt, a remarkable housing transformation is unfolding. Prime Minister Mostafa Madbouly's visionary decision to shift management and supervision of low-return initiatives from the Central Bank to the Ministry of Finance has ignited a mortgage financing revolution. With EGP 100 billion allocated for low- and middle-income individuals, interest rates have plummeted to 3%, empowering countless families to secure homes. Leading the charge is Contact Mortgage, touching the lives of 6,167 customers with EGP 838.728 million in financing. This story paints a portrait of Egypt's housing evolution, where dreams of homeownership are no longer out of reach.
According to the Social Housing and Mortgage Finance Fund (MFF), as of August 2023, banks and corporations have invested approximately EGP 62.29 billion in the low-income mortgage financing program, which has benefited roughly 527,303 customers. This initiative, initiated by the Central Bank of Egypt (CBE) in February 2014, extends extended-term loans spanning up to 30 years, offering subsidized interest rates between 5% to 7% to individuals in the low- and middle-income brackets. The MFF is responsible for providing housing units to those in the low-income group and determines their pricing based on construction expenses.
In November 2022, Prime Minister Mostafa Madbouly made a decision to shift the oversight and management responsibilities of all existing initiatives with returns below market rates from the Central Bank of Egypt (CBE) to the Ministry of Finance. This decision also encompassed various other initiatives related to tourism, vehicle replacement, and modern irrigation.
According to the Fund's report, the majority of the financing, accounting for 96.2% of the total, came from banks, amounting to approximately EGP 59.943 billion allocated to around 508,124 customers. The National Bank of Egypt (NBE) led the list of participating banks, providing EGP 16.589 billion to serve 140,547 customers, followed by Banque Misr, which contributed EGP 15.156 billion for 122,842 customers, and the Housing and Development Bank (HDB) with EGP 6.902 billion directed to 71,652 customers.
Companies, on the other hand, accounted for 3.8% of the total financing, channelling approximately EGP 2.35 billion to nearly 19,179 customers. Contact Mortgage emerged as the top-performing company in this endeavour, extending EGP 838.728 million in financing to cater to 6,167 customers.
As per the Prime Minister's directive, a sum of EGP 100 billion has been earmarked for the mortgage financing program aimed at individuals falling within the low- and middle-income brackets. This funding comes with a reduced interest rate of 3%. The Ministry of Housing, Utilities, and Urban Communities will cover the discrepancy in interest rates by compensating the participating banks.
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