Mr. Professor / Cairo, March 6, 2014
Bank

Greetings,

Further to my letter dated February 19, 2014, concerning the Egyptian Central Bank's initiative to stimulate the real estate financing sector for low- and middle-income people, issued under the decision of the Board of Directors of the Egyptian Central Bank in its session held on February 18, 2014, and referring to what was stated in Item Seven of the aforementioned decision, you will find attached the detailed rules and procedures for implementing its provisions.

I would like to draw your bank's attention to the necessity of preparing for this type of financing by training staff on how to prepare credit studies and the principles of assessing creditworthiness for customers, taking into account self-employed professionals, so that an implementation and follow-up mechanism is established, in addition to updating internal systems to align with the requirements of that initiative, with the understanding that work on it will begin from April 1, 2014. Please take the necessary action in this regard.

Accept the highest respect,

Hisham Ramzy Abdel Hafez

Detailed Rules and Procedures for the Decision of the Board of Directors of the Egyptian Central Bank dated February 18, 2014, regarding the initiative to stimulate the real estate financing sector for low- and middle-income people

Based on Article Seven of the aforementioned decision, entrusting the Supervision and Inspection Department to issue a detailed memorandum containing the rules for implementing the provisions of this decision, we present below the detailed rules and procedures that banks must comply with in this regard:

1.1 Establish a mechanism for implementing and monitoring the initiative, which includes the following:

• Establish a specialized unit for real estate financing.
• An Information Management System (MIS) that provides financial and supervisory reports to serve the purposes of the initiative.
• An effective internal control system through coordination between all concerned departments to implement the initiative mechanism.
• Prepare real estate financing contracts and documents that ensure the safety of the granted credit within a framework consistent with the Real Estate Financing Law No. 148 of 2001 and its amendments.

1.2 Allow banks to use the amount allocated for the initiative on a monthly basis after they disburse to their customers, so that each bank conducts the necessary credit study according to its policy and obtains credit approvals and fulfills all conditions, guarantees, or documents that enable the bank to complete mortgage procedures and then disburse to customers, taking into account the following at a minimum:

• Conduct inquiries about customers, which include inquiries through the Egyptian Credit Information Bureau and the Credit Risk Management Department at the Central Bank of Egypt to verify the customer's previous transactions with the banking sector, in addition to ensuring that the customer has not obtained financing under the initiative.
• The bank obtains a first-degree real estate mortgage or a deposit guarantee certificate, taking into account the decision of the Minister of Housing, Utilities, and Urban Communities No. (100) of 2014 (Attachment 1).
• Provide a system for assessing and analyzing customer creditworthiness, and attach to it a guideline sheet containing some additional criteria that can be relied upon in the assessment (Attachment 2).
• Banks receive low-income applications through the Real Estate Financing Fund.

1.3 The Egyptian Central Bank shall update an electronic system to supervise customers buying only one unit through the subsidized real estate financing system, so that the system provides real-time information about the customer's status from the issuance of credit approval and disbursement of his loan, with banks and real estate financing companies committing to the following:

• Register customer data on the system according to forms to be prepared by the Central Bank of Egypt in this regard, so that information about a customer obtaining credit approval from one of the banks or real estate financing companies is available to all other parties in real-time, and it is required that remaining banks and real estate financing companies refrain from dealing with him under the initiative from that moment to avoid duplicate issuance of credit approval for the same customer.
• For families, spousal relationship data is entered and updated upon submission of documents proving a change in the customer's marital status through the financing company or the bank that granted the loan.
• Real estate financing companies, when disbursing to customers, must disclose the name of the bank from which the company obtained the financing, and this must be included in the customer's basic data on the system.

1 The amount required from the Central Bank of Egypt each month represents the total value of actual disbursements to customers, in addition to what was directed to real estate financing companies (based on what was actually disbursed by those companies to their customers). 2 Real estate financing companies must ensure accuracy in the information entered into the system to ensure the validity of the reports issued from it, which are relied upon by other banks and financing companies in dealing with customers.

1 Banks are allowed to register on the system throughout the month until the closing date (5 working days before the end of the month). 2 According to the determinants stated in Item (4) of the decision of the Board of Directors of the Egyptian Central Bank dated February 18, 2014.

2.4 Banks shall periodically (according to the method to be determined later) do the following, taking into account the necessity of distinguishing between low- and middle-income people:
A. Provide the Egyptian Central Bank on a monthly basis with the following:
1) Repayment schedule expected for the amount required on the first working day after the end of the first quarter (excluding interest) according to the expected repayment schedules for customers who were disbursed during the relevant quarter.
2) Treasury receipts deposited on the first working day of the first month equivalent to the amount spent during the month or the required used amount 3, with reference to the rules and procedures followed by the Egyptian Central Bank in repurchase operations used for monetary policy purposes.

B. Provide the Egyptian Central Bank on a quarterly basis before 5 working days from the end of the quarter with the following:

• Value of early repayment or voluntary sale or foreclosure before the end of the loan period, with modifying the repayment schedule for the Central Bank of Egypt by excluding installments of those loans (excluding interest).
• Value of the support in the interest rate that will be returned to the Central Bank of Egypt according to what will be stated in Item (7) below.

On the bank's account on their due dates according to the repayment schedules previously approved by the Central Bank of Egypt, regardless of customer default or rescheduling of their debts. 5.5 The value of installments is automatically deducted according to the repayment schedules approved by the Central Bank of Egypt, regardless of customer default or rescheduling of their debts.

6.6 The due interest is collected periodically through the Central Bank of Egypt.

7. If the customer wishes to sell the unit or make early repayment, the support amount in the interest rate is returned from the date of grant until the date of sale/early repayment according to the following:

The required amount is aggregated through what was recorded of actual disbursements to customers on the electronic system. 3 4 (First of January, April, July, October months) (Used Amount = Net outstanding balance at the end of the quarter + Total new amount required to be disbursed - Quarterly installments due - 5 by authorization for deduction. 6 Value of early repayment or sale of units) excluding interest.

3 The difference between the subsidized interest rate and the interest rate is calculated based on applying a lending rate of 5% above the final lending rate for low-income people 7 above the final lending rate for middle-income people, then returning the difference to the Central Bank of Egypt or 4% according to the percentages stated in the table (Attachment 3).

No early repayment commission is applied.

In case of customer default, the support is returned using the percentages established in the year of default stated in the table (Attachment 3), with this being done immediately upon foreclosure of the units from the installments from the date of grant until the date of foreclosure, where the bank must provide the Egyptian Central Bank at the end of each quarter with the value of units that became its property due to customer default.

8. The margin between the lending rate of the Central Bank of Egypt to banks and the final lending rate to customers includes any of the following:

• Commission on the highest debit balance.
• Administrative expenses, interest, and other commissions.
• Valuation and mortgage expenses and any other expenses (e.g., insurance).

Tax and stamp duties are applied according to prevailing laws.

9. The bank has the right to apply a late interest rate of a maximum of 2% above the final lending rate for the customer, and this is on the due installments, and in case the bank agrees to the customer's request to reschedule the debt, pricing is done according to the initiative prices on the date of grant.

10. In all cases, the customer is not entitled to benefit from the initiative offered by the Central Bank of Egypt except once only, regardless of any real estate loans obtained or to be obtained by the customer outside the framework of the initiative, taking into account the aforementioned referral of low-income people to banks by the Real Estate Financing Fund.

11. When determining the loan value by the bank for the General Management of Credit Risk Aggregation at the Central Bank of Egypt and the Egyptian Credit Information Bureau, it is necessary to distinguish initiative customers through codes that will be provided to banks later.

These percentages can be reviewed to align with emerging cases according to the first item of the decision of the Board of Directors of the Egyptian Central Bank 7 dated February 18, 2014. 4

8.12 The new valuation of the financed units can be used, or real estate appraisers registered in the lists of expertise pools registered at the Central Bank of Egypt, or real estate appraisers can be relied upon determined by the same entities (to be provided to banks later) as a means to reduce the cost of real estate valuation according to Item Six of the decision of the Board of Directors of the Central Bank of Egypt dated February 18, 2014.

5.13 This initiative applies to all units available in new urban communities that meet the initiative's conditions and does not include those licensed for tourist housing, with confirmation that the units are designated for residential use.

14. Confirm what was stated in the decision of the Board of Directors of the Central Bank of Egypt dated April 4, 2006, regarding the amendment of the basis for assessing creditworthiness and forming provisions issued by the Board through reducing the general risk provision for loans for purchasing or renovating residential units from 3% to 1%.

15. The Supervision and Inspection Department shall periodically follow up to verify the extent of banks' compliance with implementing all items of the initiative and the quality of the portfolio formed within it, and ensure the validity of the data entered into the system and those that will be provided to banks via forms to be provided to banks later.

Must be a recent valuation reflecting the current value of the unit. 8 Arab Republic of Egypt Ministry of Housing, Utilities and Urban Communities Minister's Office Postal Code 11017 Minister of Housing, Utilities and Urban Communities 8.18 and 1 . . pas Minister of Housing, Utilities and Urban Communities and Chairman of the Board of Directors of the New Urban Communities Authority after reviewing Law No. 11 of 1948 regarding the Real Estate Registration and its amendments, Law No. 131 of 1948 regarding the Civil Code, Law No. 0 of 1979 regarding the establishment of New Urban Communities and the decisions issued in relation to it, And the Real Estate Register issued by the decision of the Chairman of the Board of Directors of the New Urban Communities Authority No. 1 of 1996% And the decision of the Chairman of the Council of Ministers No. 29 of 1995 regarding the rules and conditions organizing the management, independence, and disposal of land allocated to the New Urban Communities Authority, And the minutes of the agreement dated 2/9/2006 between the New Urban Communities Authority, the General Authority for Real Estate Financing, and the Ministry of Investment regarding the partial registration of projects in new urban communities, And the decision of the Board of Directors of the New Urban Communities Authority in its session No. 77 dated 14/11/902;

: 25Mm (Article One)

The agencies of the cities under the New Urban Communities Authority are committed to providing real estate financing companies or banks with a certificate upon their request within a deadline of fifteen days from the date of submitting the request, stating whether the buildings or residential units established on plots allocated to individuals and investors (excluding land) can be mortgaged after settling all dues to the Authority. In case of inability to mortgage the building or residential unit or rejection of the request, the reason for rejection must be clarified, and the applicant has the right to appeal it before the Main Appeals Committee.

Mortgage requests - according to the procedure of their submission - are filed in a special register for mortgages prepared by the competent administration in each new urban community agency, and all procedures taken regarding each request are recorded in it. The applicant or interested party has the right to obtain a certificate regarding what has been done regarding mortgages on this property or what measures have been taken regarding it.

(Article Two)

The agencies affiliated with the New Urban Communities Authority issue a certificate for the property or unit financed through real estate financing and required to be registered, containing all spatial data related to it and the sequence of ownership until its transfer to the registration applicant, and any transactions or mortgage restrictions that may have occurred, and the conformity of the construction with the issued permit. This certificate is directed to the competent Real Estate Registration Office for registration based on it, and a copy of it is delivered to the applicants.

. Salentil

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arages with the same وزارةالإسكان والجتمعات الدمرانية مكتب الوزير البرقم الير يدى 11011 تابع قسرار وزير الإسكان والراقق والجتمعات العمرانية 7.18 ams 1 . . pas OREERS

(221121) 5341)

In case of rejecting real estate financing applications for units owned by the New Urban Communities Authority, the heads of the Authority's agencies commit to signing the tripartite real estate financing contracts regarding their models, which are decided by the Minister of Investment according to the provisions of the Real Estate Financing Law and its executive regulations, with residential units financed by real estate financing being exempt from transfer fees.

(Note)

Partial registration of a part of the large plots allocated by the New Urban Communities Authority is permitted, provided that the financial installments due for the allocated area in full are settled up to the date of the registration request and the full price required to be registered is settled.

( case la i sall )
This decision is implemented from the date of its issuance, and the competent authorities shall execute each in what concerns it.

Minister of Housing, Utilities, and Urban Communities and Chairman of the Board of Directors of the New Urban Communities Authority S Tusiga (4) 1 cles le le - 3 120 s alle Silp A copy sent to Ms. Professor / Maysa Abdel Hamid, Chairman of the Board of Directors of the Real Estate Financing Fund Greetings,

Please be informed and alerted as necessary.

With best regards and appreciation,

all Deputy Minister Supervising the Minister's Office Mark n ell VISE ( M / Randah Al-Manshawi )

Attachment No. (2)
Guideline sheet regarding customer assessment systems

Referring to the decision of the Board of Directors of the Central Bank of Egypt dated May 24, 2005, regarding the basis for assessing customer creditworthiness and forming provisions, and what it contained of the necessity for banks to use the digital assessment method when granting personal housing real estate loans by giving scores to all assessment elements which include:

	-
	م
	ستو
	ى
	الد
	خ
	ل
	ال
	شه
ر
ي
للعمي
ل
-
مد
ى
ا
ستق
را
ر
م
ستو
ى
الد
خ
ل	-
	الم
	لاءة
-
ال
ضمانا
ت	-
	المعام
	لا
ت
م
ع
ال
جها
ز
الم
ص
رف
ي
-
ال
سمعة	-
	الو
	ظيفة
-
ال
س
ن	-
	ال
	حالة
	ا
	لا
	جتما
	عية
-
م
ست
و
ى
التعليم

In addition to the above, we list below some additional criteria that can be relied upon when assessing customers, especially self-employed professionals whose income is difficult to prove:

• Additional income that can be accepted with verification
• Savings account balance and activity at the post office
• Bank account balance and activity (if available)
• Existence of a verifiable consumption pattern with knowledge of the customer's regularity in it (through electricity bill, mobile phone bill, landline phone, consumer goods installments if any)
• Number of years practicing self-employed professions
• Social burdens (e.g., supporting children, father and mother, ..)
• Wife's employment if available
• Type and area of residence

Return of Support CalculationAttachment No. (3)

ســـــــــــــــنــة الســــــــــــداد	مدة القر
	ض
20	19	18	17	16	15	14	13	12	11	10	9	8	7	6	5	4	3	2	1 100%	1
	100%	100%	2
	100%	100%	100%	3
	100%	100%	100%	100%	4
	100%	100%	100%	100%	100%	5
	90%	100%	100%	100%	100%	100%	6
	80%	90%	100%	100%	100%	100%	100%	7
70%	80%	90%	100%	100%	100%	100%	100%	8
60%	70%	80%	90%	100%	100%	100%	100%	100%	9
50%	60%	70%	80%	90%	100%	100%	100%	100%	100%	10
40%	50%	60%	70%	80%	90%	100%	100%	100%	100%	100%	11
30%	40%	50%	60%	70%	80%	90%	100%	100%	100%	100%	100%	12
20%	30%	40%	50%	60%	70%	80%	90%	100%	100%	100%	100%	100%	13
10%	20%	30%	40%	50%	60%	70%	80%	90%	100%	100%	100%	100%	100%	14
0%	10%	20%	30%	40%	50%	60%	70%	80%	90%	100%	100%	100%	100%	100%	15
0%	0%	10%	20%	30%	40%	50%	60%	70%	80%	90%	100%	100%	100%	100%	100%	16
0%	0%	0%	10%	20%	30%	40%	50%	60%	70%	80%	90%	100%	100%	100%	100%	100%	17
0%	0%	0%	0%	10%	20%	30%	40%	50%	60%	70%	80%	90%	100%	100%	100%	100%	100%	18
0%	0%	0%	0%	0%	10%	20%	30%	40%	50%	60%	70%	80%	90%	100%	100%	100%	100%	100%	19
0%	0%	0%	0%	0%	0%	10%	20%	30%	40%	50%	60%	70%	80%	90%	100%	100%	100%	100%	100%	20