Egypt has set up its first private sector mortgage company, the Egypt Housing Finance Corporation (EHFC).
The venture brings together the Egyptian American Bank (EAB), the International Financial Corporation (IFC), Deutsche Investitions und Entwicklungsgesellschaft (DEG, a member of the German KfW Group), HDFC Investments, a subsidiary of Housing Development Finance Corporation Limited, India, and the Bank of Alexandria (BOA).
The authorised capital of the new entity will be 100 million Egyptian pounds. Holding a 40 per cent share in the company, EAB has spearheaded the creation of EHFC.
"We will be focused on providing individual mortgages for first time home buyers in Egypt," said Roderick Richards, managing director of EAB. "This will come as welcome news to prospective newly-weds, and to those in middle income brackets who are seeking financial support to buy their homes."
The Egyptian Government passed Law Number 148 in June 2001 which relates to mortgage activities.
"Passage of the Mortgage Law has paved the way to attract to our project such internationally renowned development finance institutions as IFC and DEG, as well as our technical partner, HDFC, whose proven expertise in mortgage finance in India will be brought to the new venture," said Richards.
"Not only in the value of institutions such as IFC, the private sector arm of the World Bank Group, and Germany's DEG, but also in the experience of our long-term partner, Bank of Alexandria, and in the proven record of HDFC."
"HDFC established the first mortgage company in India in 1977, and now enjoys a share of more than half that market. In addition to its shareholding, HDFC has signed an agreement to provide technical assistance to EHFC. John Smetanka, EAB Head of Consumer Banking, said:
"The establishment of EHFC is a further step in expanding the range of services that EAB will be able to offer to its individual clients.
"Last year we launched our first credit card to complement the range of consumer loan facilities provided by the bank; the introduction of mortgage products will now allow us to satisfy afundamental need of our clients."
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