Funding affordable housing
IN AN ATTEMPT to boost the real estate finance system, a joint cooperation protocol was signed this week between the National Bank of Egypt and the Real Estate Finance Guarantee and Support Fund. Niveen Wahish reports.
According to the 2001 Real Estate Finance law, the fund will provide benefactors with a non-refundable grant equivalent to 15 per cent of the value of a given unit within a limit of LE10,000. Recent modifications in the executive charter of the law have categorised possible low- income individuals who can benefit of the fund's assistance as those with revenue of LE12,000 for single individuals and LE18,000 for families. Benefactors can take advantage of the fund's assistance to acquire any unit whose value falls within the financing limits of the fund.
Besides the 15 per cent non-refundable grant, the fund will coordinate with banks to finance 65 per cent of the value of the unit, while the benefactor will provide the remaining 20 per cent. That 65 per cent of funding can be repaid by the benefactor, in monthly installments which do not exceed 25 per cent of the benefactor's income, over a period of 30 years.
To carry this out, the fund has at its disposal around LE400 million in assets as well as cash. Moreover, the NBE will contribute LE100 million within the framework of this new cooperation protocol.
The minister of investment described the move as the first real step towards activating the mortgage law. Although the law was issued in 200l, its implementation has been slow. The situation has improved, however, in the wake of modifications introduced last month to the executive charter of the law adjusting, among other things, the way companies calculate individuals' income. As Sameh El-Torgoman, head of the Real Estate Finance Authority, pointed out, the number of individuals who have been able to acquire financing has improved from a handful in early March to around 450 today. He added that the number is expected to increase in the coming period by leaps and bounds.
By encouraging banks to join into the financing of real estate, Hussein Abdel Aziz, chairman of NBE, said that banks will be putting to good use funds which are currently not being exploited. He said that at a time in which banks' deposits have increased by 15-20 per cent annually, their investment has grown by no more than five per cent.
Banks are expected to play a greater role in real estate finance in the coming period, particularly since the Central Bank of Egypt has recently allowed them to lend at least five per cent of their loan portfolio to the real estate finance. This is a huge sum, considering that the loan portfolio of Egyptian banks is estimated to be LE350 billion. In NBE, alone LE3.4 billion could be dedicated to that purpose. As Mahmoud Mohieldin, minister of investment, said during the press conference following the signing of the cooperation protocol, banks are essential to the development of real estate activity in Egypt.
Barclays profits up
BARCLAYS Bank Egypt announced last week a 59 per cent increase in its annual profits, which rose from LE93 million in 2003 to LE148 million in 2004.
The bank reported better performance across the board, with a net operating income of LE275 million, a 33 per cent increase compared to LE207 million in 2003. Barclays Bank PLC has also succeeded in 2004 in acquiring a 40 per cent share of the bank which was previously owned by Banque du Caire, giving it Barclays Bank PLC full ownership of the bank.
The bank's capital also increased from LE240 million in 2003 to LE362 million in 2004. To enable the bank to meet the LE500 million minimum capital requirements set by the Central Bank of Egypt, 85 per cent of the 2004 profits will go towards increasing the capital to LE497 million, with the remaining LE3 million to be added before June 2005.
The financial results are a reflection of total activity of the bank, whose number of clients jumped by 40 per cent. The bank also introduced credit cards in August, and so far has issued 3,400 Barclays cards, with 1,000 more awaiting processing.
Moreover, the bank entered into investment banking on behalf of its clients last year for the first time acting.
Intel in Egypt
PRIME Minister Ahmed Nazif recently signed a long-term cooperation agreement with Craig Barrett, chief executive officer at Intel Corporation, aiming at accelerating Egypt's information and communication technology transformation.
"Building strategic relationships with global corporations such as Intel is essential for boosting up our economy because it will allow Egypt to acquire the technical know-how and scientific research studies," said Nazif. "This kind of knowledge and creativity will lead Egypt to a better future," he added.
Intel's commitment to work with the Egyptian government and private companies has further extended to the establishment of the Platform Definition Centre in Cairo, which will define and develop platforms designed specifically for the needs of Intel customers across the Middle East and Africa.
In addition, Intel has inaugurated the Intel Software Enablement Lab which will provide software products to help regional software vendors bring their products faster to the market through technical training and market development support.
"These platforms will complement Intel's existing platform portfolio and will help people improve their lives through access to technology," Barrett said.
Moreover, Intel has taken key steps to intensify technology education in public schools in an attempt to create a competitive advantage for Egypt. For example, the implementation of Intel Teach to the Future programme has helped Egypt establish new "e-education" initiatives. Since the launch of the programme in April 2004, thousands of teachers have been trained to integrate technology into classroom instruction and, consequently, enhance student learning.
In a further show of commitment to the local market's growth, Intel will bring the International Science and Engineering Fair (ISEF) to Egypt in the upcoming academic year. ISEF is the largest pre-college international science competition, showcasing the world's most promising young inventors and scientists as they compete for awards and scholarships worth more than $3 million. Mohamed Zohair, a secondary student, invented an aerial transportation vehicle providing emergency services in traffic-congested Cairo, so the Ministry of Education and Intel nominated him for this event in May.
Intel also supports both the government-assisted PC Purchase programme and the PC-for-every-citizen initiative, which try to bridge the digital divide and build personal computer skills necessary for competing in the global economy.
THE RISING demand for alternative remedies in the form of medicinal and aromatic plants could cure what ails Egyptian farmers. However, lack of education on the best ways to handle these high-value agricultural products often result in damaged goods that are unable to meet Western standards.
Efforts under the Agricultural Exports and Rural Income Projects (AERI) are now underway to help Egyptian farmers improve their harvesting skills.
One of the main problems farmers face is the way they dry their plants. Additionally, products being shipped overseas sometimes are turned back due to excessive levels of chemical residue. Despite the potential to export 5,000 tonnes of chamomile, for example, exports currently stand at only 1,000 tonnes, primarily because of microbiological and chemical residue.
Presently, post-harvest handling facilities are now being built to either dry plants evenly under a roof or to extract oils from them.
According to experts, the Egyptian growers' profits can be phenomenal if they could handle their harvest properly. For example, one feddan of jasmine produces almost half a kilo of jasmine essence with a market value of LE20,000 compared to no more than LE1,800 for sugar cane and LE2,000 for green beans.
"We are not going out there to create a market. We know there is a demand and every indicator is that the demand will increase year to year," said Peter Wetzel, a technical adviser at AERI.
Websphere for businesses
IBM has revealed its Websphere solutions which brings connectivity to companies and enables them to have web interface and integrate effectively with other applications, portfolios and worldwide business partners. It also offers business-to-business integration and troubleshooting integration-related problems. Furthermore, Websphere commerce integration provides an online marketplace where customers and vendors meet.
"Seventy per cent of our customers, including banks, governmental organisations, and medium enterprises, use Websphere because it is easier to install and use than other applications and plays very well with other portfolios," said Markus Houben, head of Websphere Software Organisation.