City Edge Developments has signed a cooperation protocol worth EGP 1bn with the Commercial International Bank (CIB) – Egypt.
The protocol’s signing comes as part of the mortgage finance initiative launched by the Central Bank of Egypt (CBE), with the aim of expanding this type of financing. It comes as part of the comprehensive development plan and Egypt’s Vision 2030, to enable citizens to obtain proper housing.
Ashraf Salman, Chairperson of the City Edge Real Estate Development Company, said, “By signing the protocol, we seek to provide an opportunity for the largest number of customers to benefit from the CBE’s initiative for real estate financing, as the real estate sector is of great importance due to the role it plays in the growth of the national economy.”
He added, “This is because it is considered one of the most important indicators of the progress and growth of countries, due to its association with about 100 industries, directly and indirectly.”
Salman noted that growth in the real estate sector has a commensurate positive effect on all other sectors, and contributes to their growth.
Amr El-Ganainy, General Manager of Financial Institutions Group at CIB – Egypt, said, “We aim to revitalise this vital sector, by providing multiple financing programmes for residential units which are commensurate with the needs of various individuals.”
He explained that the initiative offers an 8% diminishing return and a maximum repayment period of 20 years, at a value of EGP 2.25m per unit. It covers a maximum area of 150 sqm net, provided that the value of the down payment paid by the customer is 20% as a minimum of the total value of the unit. This comes in accordance with the detailed conditions and procedures issued to implement the CBE initiative.
“The signing of the protocol comes as part of the CBE’s initiative, which aims to stimulate mortgage financing by providing long-term financing at decreasing interest rates to ensure the necessary support to citizens,” said Mohamed El-Mikkawi, CEO of the City Edge Developments.
He added that the cooperation protocol with CIB – Egypt represents a major boost to Egypt’s real estate market. City Edge has a portfolio of projects that include fully finished units ready for delivery, and compatible with the terms of the initiative.
Hassan Nasr, Head of the Financial Sector at City Edge, said that several factors have contributed to the need to support the real estate sector through appropriate financing.
They include high economic growth rates, declining inflation rates, low interest rates, as well as a change in social demographics with the increase in Egypt’s youth segment. This has made it necessary to provide housing units that link purchasing power with easy payment terms, to achieve the objectives of CBE’s initiative for mortgage financing.
According to the protocol, CIB – Egypt will provide payment facilities to City Edge customers through three systems. The first includes providing mortgage finance with a repayment period extending over 20 years and a minimum down payment of 20% within the CBE initiative.
The second is to provide various payment periods for units not included in the initiative, up to 20 years according to the real estate finance law. The third system offers payment periods of 20 years to previously contracted clients who wish to sell units to others, according to the re-sale system.