Cairo, June 5, 2007—IFC, the private
sector arm of the World Bank Group, today signed an investment and advisory
agreement with the Egyptian Mortgage Refinance Company, the
country’s first mortgage liquidity company. The financing includes an
equity investment of up to $3.5 million and a partial credit guarantee
facility of up to $10 million that will help the company build its operational
capacity and internal systems and help it issue bonds with varying maturities
to develop the mortgage and capital markets in Egypt.
The project encourages primary mortgage lenders, banks, and housing finance
companies to provide longer-term, market-based loans for residential housing,
increasing access to finance and home ownership. By providing longer-term
loans, the company will help more people afford and buy homes.
IFC Advisory Services in the Middle East and North Africa - PEP-MENA -
will advise EMRC on key areas, including operational policies and procedures,
human services and product administration, and developing an information
technology infrastructure.
“We are happy to collaborate with IFC and hope to build a strong partnership
that leverages our local expertise with IFC’s international experience.
The Egyptian mortgage market is growing rapidly with collaboration between
public, private, and multilateral entities. We look forward to working
closely with all our stakeholders to foster an affordable housing market
in Egypt,” said Iman T. Ismail, EMRC’s Managing Director.
Dr. Mahmoud Mohieedin, Minister of Investment, said, "The mortgage
market in Egypt has been significantly growing over the past few years,
originating over LE 1 billion loans. The Ministry of Investment, in collaboration
with various international organizations, is consolidating efforts to promote
this sector. Today, we welcome IFC's contributions and their investments
in the Egyptian Mortgage Refinance Company, which play a vital role in
providing long-term financing to mortgage finance companies and banks to
achieve the overall objective of affordable housing in Egypt."
Michael Essex, IFC Director for the Middle East and North Africa, said,
“EMRC is operating in a challenging environment, where it must develop
an entirely new business model in a sector that is relatively undeveloped
in Egypt. We expect that our investment and advisory services package will
help develop the sector.”
Real estate and property financing are key elements of economic growth.
A developed mortgage market promotes an efficient housing finance system
and makes home ownership more affordable. A developed housing sector also
creates jobs in construction and industries that supply building materials
and furnishings.
“This cooperation resulted from our efforts to develop and sustain the
mortgage finance market in Egypt,” said Osama Saleh, Chairman of the Mortgage
Finance Authority. “Joining forces with IFC is another milestone in our
dynamic evolution and supports our vision to increase home ownership,”
he added.
About IFC
IFC, the private sector arm of the World Bank Group, promotes open and
competitive markets in developing countries. IFC supports sustainable
private sector companies and other partners in generating productive jobs
and delivering basic services, so that people have opportunities to escape
poverty and improve their lives. Through FY06, IFC Financial Products has
committed more than $56 billion in funding for private sector investments
and mobilized an additional $25 billion in syndications for 3,531 companies
in 140 developing countries. IFC Advisory Services and donor partners have
provided more than $1 billion in program support to build small enterprises,
to accelerate private participation in infrastructure, to improve the business
enabling environment, to increase access to finance, and to strengthen
environmental and social sustainability. For more information, please visit
www.ifc.org.
About IFC PEP-MENA
IFC PEP-MENA is a multidonor facility for advisory services that supports
private sector development across the Middle East and North Africa. IFC
PEP-MENA focuses on improving the business enabling environment, strengthening
financial markets, supporting SME development, and promoting privatization
and public-private partnerships. From its inception through FY06, IFC PEP-MENA
has committed more than $20 million in advisory projects. Its activities
are funded jointly by IFC and the following donors: Canada, France, the
Islamic Development Bank, Japan, Kuwait, the Netherlands, the United Kingdom,
and the United States.
About the Egyptian Mortgage Refinance Company
EMRC, Egypt’s first mortgage liquidity company, was established in June
2006 as a joint stock company. It refinances and purchases long-term residential
mortgage loans by primary lenders. It also issues bonds and notes in the
capital market to raise funds. The company is majority-owned by subscribers
of its primary mortgage lenders and partially owned by the Central Bank
of Egypt, which has an 18 percent share. For more information, please visit
www.emrc-online.com.