Press Releases

IFC Helps More Egyptians Own their Homes and Deepens Capital Markets

In Washington:
Ahmed Badawi-Malik

Phone: (202) 458-7148


WASHINGTON D.C./CAIRO, January 26 2004—The International Finance Corporation, the private sector arm of the World Bank Group, signed a $1.6 million agreement in Cairo today for a 20 percent equity stake in the Egyptian Housing Finance Company (EHFC), helping establish Egypt’s first private company in this sector.

Egypt has strong pent-up demand for long term housing loans, which are relatively small and are now provided by only a few public sector banks. Most Egyptians buying (non subsidized) housing units currently face the choice of either paying the whole amount up front or paying short-term installments to property developers at high interest rates. With IFC’s investment, EHFC will tackle the scarcity of long-term loans for potential homeowners, acting as a pioneer for mortgage financing. Homes will be better quality, more readily available and affordable for Egypt’s burgeoning middle class in particular.

EHFC is expected to play a catalytic role in developing a housing finance industry that will indirectly bolster economic growth and job creation in Egypt. The “real” economy will get a sustained lift from higher output and jobs growth in the construction sector and other downstream industries, while financial markets will deepen as more savings held by local and expatriate Egyptians pass into the formal economy.

Sami Haddad, IFC director for Middle East and North Africa, noted that “IFC’s investment in EHFC demonstrates our commitment to supporting the deepening of Egypt’s financial markets through technical assistance and institution building, while, at the same time, creating an outlet of affordable long-term housing finance will enable a vast number of Egyptians to obtain a higher standard of living.”

Total capitalization of EHFC amounts to $8.1 million (EGP50 million), with the Egyptian American Bank, the anchor investor in EHFC, holding a 40 percent equity stake. Other shareholders in EHFC include 20 percent held by Deutsche Investitions-und Entwicklungsgesellschaft (DEG), a member of the German KfW group and one of the largest European institutions for long-term project and company financing; Housing Development Finance Corporation (10 percent), one of India’s premier financial companies and the dominant force in the Indian mortgage market; and Bank of Alexandria (10 percent), Egypt’s state-owned bank.

Drawing on the technical expertise and other strengths of its stakeholders, EHFC will enhance competition in the housing finance sector and introduce a model of “best practices” for future entrants into the field.

The mission of IFC ( is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY03 was $16.8 billion for its own account and $6.6 billion held for participants in loan syndications.