The United Bank of Egypt aims to increase its real estate portfolio to EGP 300m by the end of this year, according to Mohamed Samir, head of real estate funding at the bank.
Samir explained that the portfolio includes financing low and middle income individuals in addition to the units of Dar Misr within the initiative launched by the Central Bank of Egypt (CBE).
He added that the volume of the bank’s portfolio is currently estimated at EGP 110m, noting that there is an agreement with the Mortgage Finance Fund (MFF) to finance 11 projects in the new urban communities, such as 6th October City, 10th of Ramadan City, Borg El-Arab, New Sohag, and El Nubaria.
According to Samir, the bank has about 600 real estate clients currently being examined by the bank, with total financing of EGP 60m. Most of the clients belong to the low-income category. The bank also allocates financing worth EGP 20m for middle and upper-middle classes within the CBE’s initiative.
He explained that there has been an increase in the volume of real estate portfolio in the bank over the past 10 months, as the number of clients in the sector increased from 24 to 428. The financing during that period reached EGP 30m.
He pointed out that the bank is currently designing a finishing programme for the new units, in addition to the ownership rental programme. The implementation of both is expected to be approved soon by the CBE.
The branch of the bank in Sohag has delivered about 36 units a few days ago as part of the project in New Sohag City as a first phase within the low-income housing project, according to the initiative launched by the CBE in cooperation with the MFF and the Ministry of Housing.
According to Samir, the project of New Sohag City is part of the one-million unit project for low-income individuals, a project launched by the government. It is considered one of the most important national projects to achieve social justice, as it aims to improve the living conditions of citizens and provide them with proper housing as well as eliminating slums.
Samir noted that the United Bank of Egypt was one of the first banks to take part in the initiative launched by the CBE for real estate financing of housing for low- and middle-income citizens. An initiative that yields several advantages, for the banks as well as for the state and the people.
He explained that the initiative provided banks with an opportunity to refinance real estate clients at low prices, with the aim of supporting the real estate sector. The initiative has also supported the state in achieving its goals of establishing a system for comprehensive social justice, where support reaches those who need it.
Samir added that the initiative by the CBE has contributed to new segments of clients benefiting from real estate funding with a decreasing interest rate of 5% for 20 years, especially the category of low-income individuals with a maximum monthly income of EGP 1,400.
He stressed that including this segment in the initiative is considered a great accomplishment by the CBE, especially since these segments deserve the financing. A new segment for upper-middle incomes is also included, with residential units worth EGP 950,000 and a decreasing interest rate of 10.5%, which means that the initiative is covering even more segments of the society.