The CEO of the Social Housing and Mortgage Finance Fund (SHMFF), Mai Abdel Hamid, highlighted Egypt’s pioneering experience in providing suitable housing for low- and middle-income citizens through the Presidential Initiative “Sakan Lel Masryeen” (Housing for All Egyptians) during a workshop co-organized by the Alliance for Financial Inclusion (AFI) and the Central Bank of Egypt (CBE).
The workshop, titled “Affordable Housing Finance,” is being hosted by Egypt in collaboration with AFI and the United Nations Human Settlements Programme (UN-Habitat) from April 7th to 10th. Ms. Mai Abul Naga, First Deputy Governor of the CBE, stated that the workshop brings together representatives from ten central banks across different nations to discuss the challenges of housing finance and explore innovative, comprehensive, and sustainable strategies to address them.
Ms. Abul Naga emphasized that Egypt’s hosting of this workshop, in partnership with international entities, serves as a recognition of the significant achievements the country has made in the field of affordable housing and sustainable development.
During her presentation, Ms. Abdel Hamid underscored the accomplishments of the “Sakan Lel Masryeen” initiative in providing housing for low- and middle-income Egyptians and the crucial role played by the banking sector in its success. The workshop was attended by officials from the central banks of Tajikistan, Kenya, Bangladesh, Pakistan, Morocco, Egypt, Suriname, Tanzania, Zambia, and Zimbabwe.
Ms. Abdel Hamid began by noting that the SHMFF has aimed to construct one million housing units for low-income citizens since its establishment in 2014. The fund contributes to securing the right to housing, as enshrined in the Egyptian Constitution, and focuses not only on building housing units but also on developing integrated urban communities ready for immediate occupancy.
She explained that the SHMFF’s core function involves developing plans for constructing housing units for low- and middle-income citizens and securing the necessary financing to ensure the program’s sustainability and continuity.
Ms. Abdel Hamid pointed out several challenges the fund faced during the implementation of the “Sakan Lel Masryeen” initiative. These included the banking sector’s initial reluctance to engage with the initiative’s clients due to their lack of prior banking history, with only four public sector banks participating at the outset. Other challenges included the limited availability of formal housing units in the market and the weak purchasing power of low-income citizens. However, she noted that the fund successfully overcame these challenges through collaboration with the CBE and various state entities.
She elaborated that the fund operates based on clear and pre-defined mechanisms, conducting various studies before launching any announcements to understand variables related to income limits, targeted subsidy values based on unit sale prices, maximum debt burdens for clients, and applicants’ age, residence, or workplace.
Ms. Abdel Hamid highlighted that the program has also provided suitable housing for social groups who previously faced difficulties in owning a unit, such as women, who own 24% of the units offered through the program. Additionally, 5% of the units are allocated to citizens with disabilities, and the program has empowered self-employed individuals and private sector employees to obtain housing units, representing 71% of the total beneficiaries.
She further noted that the SHMFF has contributed to increasing Egypt’s urban area from 7% to 14%, with 85% of the units offered by the fund being built in new cities, facilitating the relocation of more families to these areas.
Ms. Abdel Hamid emphasized that the transfer of citizens to their housing units in new cities required significant efforts, such as providing adequate transportation networks and developing the areas surrounding the units to encourage permanent residency. Despite the high costs involved, the Egyptian state bore these expenses due to the program’s importance and the necessity of expanding Egypt’s urban footprint.
She stated that 722,000 housing units have been completed, 648,000 allocated, and 298,000 are under construction. The fund recently offered 79,000 units under the “Sakan Lel Masryeen 5” announcement, which witnessed unprecedented demand since the program’s launch, and the “Sakan Lel Masryeen 7” announcement is planned for the near future. The total mortgage finance granted to beneficiaries to date amounts to approximately EGP 82.86 billion, with EGP 10.13 billion in cash support.
Ms. Abdel Hamid explained that the SHMFF has benefited from the CBE’s mortgage finance initiatives launched in 2014 and continuing to date, with interest rate subsidies paid by the Ministry of Finance within social protection program allocations. The interest rate ranges from 7% to 12% with repayment periods of up to 20 years.
She added that the fund relies on the Ministry of Finance to support the interest rate, with the ministry covering the subsidy amounts for each beneficiary, facilitating affordability for low- and middle-income citizens. The SHMFF sells housing units at their actual cost without any profit margin and provides increasing cash support based on the applicant’s income.
The program has successfully gained the trust of 30 financing entities, due to beneficiaries’ commitment to timely repayments, with the fund now collaborating with 20 banks and 8 mortgage finance companies, a significant increase from the initial four banks.
Ms. Abdel Hamid outlined the regulations and procedures governing mortgage finance adopted by the CBE in coordination with the fund and circulated to participating banks in 2014, with subsequent amendments. She also highlighted the incentives provided to commercial banks to encourage their participation in the program, which has positively impacted financial inclusion, improved banks’ profitability, and diversified their portfolios, thereby reducing credit risks.
She added that the fund also collaborates with various governmental, private, and international entities, including the New Urban Communities Authority, the CBE, the Ministry of Finance, the World Bank, and the International Finance Corporation. In the private sector, the fund cooperates with approximately 2,000 companies for the construction of housing units and 11 credit bureaus to verify the data provided by citizens.
At the conclusion of the session, Ms. Abdel Hamid engaged in an open discussion with the attendees, who expressed keen interest in the mortgage finance system used in the “Sakan Lel Masryeen” initiative, its practical implementation, and the calculation of cash and interest rate subsidies. Attendees also inquired about cooperation with international organizations such as the World Bank and the utilization of their funding in the program. Ms. Abdel Hamid emphasized that cooperation with the World Bank is vital to the program’s success, as its funding is used to provide direct cash support to citizens.
Participants from various foreign countries expressed their desire to learn more about Egypt’s success story in achieving financial inclusion through the social housing program and its mortgage finance system, recognizing its contribution to sustainable program financing. They intend to conduct a research paper on the Egyptian experience to benefit other nations. Ms. Abdel Hamid invited the attendees to visit the “Sakan Lel Masryeen” housing units for low- and middle-income citizens to gain firsthand insight into the Egyptian model.
The AFI is a leading global alliance in financial inclusion policy, working to promote financial inclusion. The alliance comprises central banks and financial regulatory institutions from 84 countries, connecting policymakers and enabling them to develop effective initiatives to enhance financial inclusion. Over the past fifteen years, AFI members have launched 1,130 financial inclusion policies, contributing to the financial inclusion of 850 million people. The alliance also produces numerous reports, analyses, and regular commentary on the state of financial inclusion.
