CAIRO - Egypt plans to bring in simpler procedures to secure mortgages, aiming to lift the number of customers by 15,000 next year, boosting the nascent market for housing loans, an official said on Tuesday.
Red tape and conservative lending rules have hamstrung Egypt's mortgage sector. Mortgages make up under half a per cent of gross domestic product (GDP), compared to 14 percent of GDP in Morocco and more than 80 per cent in Britain in 2008.
Local demand has shield Egypt's real estate market from a global credit crunch, but analysts and executives say the country will need to grow its mortgage market to continue drawing investment to the property sector.
The state Mortgage Finance Fund is signing new protocols with mortgage financing firms that will help make registration more efficient, the agency's chairman May Abdel Hamid said in comments carried by state newspaper al-Ahram.
Egypt now boasts 11 mortgage financing firms, up from two in 2005. Abdel Hamid said they were in talks with three more banks to set up mortgage financing arms, that are expected to start operation in the next two months.
The agency intends to cut back the time needed for mortgage registration from six months to a month, Abdel Hamid said, adding that an electronic database to give access to information for lenders and customers was also being set up.
The new steps will help expand the customer base by 15,000 individuals within 2011. Total mortgages stand at around 4.5 billion Egyptian pounds, representing no more than 75,000 customers.
The government has said it planned on passing new mortgage financing law in the next parliamentary session on December 13. Abdel Hamid said in June the new law could help double the size of the industry in two years.