After becoming the first mortgage finance company to obtain a license from the newly formed “Egyptian Financial Supervision Authority” (EFSA), Sakan Finance is currently preparing to make its services available to the general public before the end of 2009.
With a total start up capital of EGP 150 million, Sakan Finance becomes the second highest capitalized mortgage finance company in the market to date. Sakan’s approved licensed capital stands at EGP 1 Billion.
Key shareholders in the new venture include the Housing and Development Bank with a stake of 28%, Al Yassin Holding with a 51% share, and the remaining 21% share held by a Dubai based investment group. Sakan Finance has appointed Mr. Fathi El Sebaie to the post of Chairman of the Board. El-Sebaie, also currently heads the Housing and Development Bank.
Ahmed Haggag, consultant to the board of Sakan, believes that the timing is right for the new venture. “In the wake of the recent financial crisis, the real estate market has become more clearly defined, said Haggag, “the corrective actions on real estate pricing and the direction of key developers towards the middle and upper-middle class market segment has recreated a 'true' demand for realistically priced real estate units and developments.” Haggag added that as fears of the financial crisis begin to fade, this represents a new beginning for property finance companies in Egypt. “With the increase of players in the market and accelerated growth rates, the market is ready to overcome the challenges of expensive, difficult, and time-consuming property financing options and a lengthy property registry process.”
Sakan Finance plans to introduce seven key mortgage finance products as a part of its offering, four of them being completely new products to the market. The company has finalized its rollout strategy of these products in anticipation of its December launch.
On the infrastructure front, Sakan Finance has invested heavily towards its core servicing and origination requirements by partnering with Nucleus Software, an India based IT provider, who are currently the world leader in retail lending software. The project’s scope will incorporate 4 distinct integrated systems, through which Sakan will aim to accelerate the processing time of applications for clients, from the time of their first visit to the company throughout the lifetime of the repayment period.
Mohamed Al Azzabawy, Executive Manager of Sakan Finance, added that the decision of the Housing and Development Bank to invest in Sakan Finance comes as part of the bank’s belief in the growth potential of the property financing market, and that this interest has been mirrored by the majority of Egypt’s large public sector banks, who have recently pledged billions of pounds to the sector.
Other key shareholders, such as Yassin El Shoukeiri, Chairman of Yassin Holding, view Sakan as a major contribution to the rapidly growing property finance market. “Sakan Finance is seen as an extension to the objectives of our financial investment and holding company, complementing our other investments in banks and intermediary financial organizations. We view Sakan as a company that is in an ideal position to have a positive impact on the community, and the housing market” added El-Shokeiri.
Gamal El-Hay, Deputy CEO of the Dubai Airports Company, member of the National Council of the United Arab Emirates, and Chairman of the Board of El-Hay Companies, sees investing in the Egyptian real estate finance market as a logical step forward due to this market’s quarterly growth rate of over 30%.
His partner, Mansoor Lootah, owner of Dubai based PanGlobe Advocates and the International Office for Advocacy and Legal Consultancy, stressed that it is imperative that a strong legislative framework governs property finance in Egypt, which will allow for continued growth and minimize unexpected market changes.
”This should attract greater investments from foreign firms to the Egyptian property financing market, thanks to the confidence and support provided by the Egyptian government, represented in the Ministry of Investment and the Egyptian Financial Supervision Authority.”
