Mohamed El‑Kahky: Mortgage Financing to See a Boom After Interest Rate Decline

Mohamed El‑Kahky, Managing Director of Tamweel Mortgage Finance, stated that total loans granted by companies last year (2020) for purchase with investment purpose dropped by around 50%. Residential purchases fell by about 20% due to the fallout from the COVID‑19 crisis. He noted that investment-driven buying has been limited to holiday homes and office units.

He affirmed that mortgage finance in Egypt has not yet fulfilled its potential, despite being the ideal tool to facilitate resale of completed units amid current conditions where few can pay cash or rely on developers’ installment plans. Developers typically only offer long-term financing for units under construction, not for ready units.

El-Kahky explained that awareness of mortgage finance is increasing through experience sharing, the Central Bank’s ongoing initiatives that support the sector, and the recent interest rate declines, prompting more clients to seek financing. Current mortgage financing rates range from 13% to 14% declining, equivalent to about 8% fixed.

He noted that the company’s strategy over the next five years aims to promote mortgage financing across all segments—especially low- and middle-income young people—by expanding its branch network across various governorates and diversifying its financing portfolio.

El-Kahky added that the company’s loan portfolio balance reached around EGP 1.3 billion. Total loans amounted to EGP 540 million in 2019 and exceeded EGP 500 million last year despite COVID-19’s challenges. He noted that the residential sector accounts for 80% of the portfolio, while administrative and commercial sectors make up the remaining 20%.