Bankers said that individual loans in banks proceeded normally and were not stopped or affected by the decision of the Central Bank to raise interest rates, whether personal loans or car loans.
They added – in exclusive statements to Al Mal – that interest rates on retail loans in banks saw an upward movement as a natural response to the decision to raise interest rates, but the interest rate is not fixed, and there is a difference in pricing according to each financing program, as well as the degree of risks.
They pointed out that the Egyptian banking sector is currently re-pricing all its financing products for its individual customers to suit the current situation, especially after the Central Bank of Egypt raised interest rates by a percentage point.
Bankers: “Individuals” continue normally … and their interest rates are re-priced
The Monetary Policy Committee of the Central Bank of Egypt decided at its extraordinary meeting last Monday to increase the overnight deposit and lending rates and the central bank’s main operating rate by 100 basis points to 9.25%, 10.25% and 9.75% respectively. and the credit and discount rates were increased by 100 basis points to 9.75%.
The monthly inflation rate rose to 1.2% at the end of last February, after being 0.3% in the corresponding period of the previous year, an increase of 0.9%, compared to about 0.8% at the end of last January, with a difference. of 0.4%.
The Central Bank of Egypt said that the annual inflation rate at the end of last February reached 7.2%, an increase of 0.9% compared to January of the same year, which recorded 6.3%.
Monthly inflation rates, according to what was announced by the Central Agency for Public Mobilization and Statistics, rose to about 1.6 percent, compared to 0.9 percent in the previous January.
Ayman Jamjoom, head of the branch group at the National Bank, confirmed that individual loans within the National Bank have been progressing normally since the decision to raise interest rates, and this has not stopped, and the customer can get a loan at any time, or loans included in certificates or loans that are not secured.
He pointed out that the interest rates on individual loans of all kinds have moved along with the increase in interest rates, which is a natural thing, and the pricing of the loan differs according to the client’s condition itself, and whether the loan with a salary is. guarantee or without a salary transfer or a public or private sector company, and therefore there is no fixed interest rate for each program or contract that has its own price, especially in loans that are not secured by a certificate, because there is a risk ratio that is also taken into account depending on the transaction.
He added that about 2% is added to the interest of the loan secured by a certificate. If the client wants to link a certificate with a yield of 18% and obtain a loan with the guarantee of this certificate , 2% will be added. it, and thus the interest on the loan becomes 20%.
Immediately after the Central Bank’s decision to move interest rates by 1% last week, the National Bank of Egypt and Egypt issued certificates with a high return of 18% annually, the proceeds of which are paid on a monthly basis.
The yield of certificates with a yield of 18%, just 4 days after their issuance, according to the closing of transactions last Thursday amounted to about 153 billion pounds.
Wali El-Din Lotfy, deputy managing director of Credit Agricole Egypt, said that all kinds of retail bank loans do not stop at his bank, and loans are of course granted to individuals.
In turn, Rehab Azmy, director of the retail banking sector at The United Bank, confirmed that most banks are currently repricing all their financing products, most notably loans granted to individuals, in addition to savings boats, on the decision of the Central Bank of Egypt to raise interest rates on deposit and lending% 1 at its last extraordinary meeting.
She said the banks had managed to cross this stage in particular, after the Central Bank raised interest rates following the decision to float at the end of 2016. The banking sector has managed to handle and study credit quotes well, and during that period he succeeded in bringing about growth in the rates of individual financing.
On 3 November 2016, the Central Bank of Egypt decided to liberalize the exchange rate of the pound within the framework of the state’s implementation of an economic reform program, after agreeing with the International Monetary Fund on this program with its commitment to finance to provide up to $ 12 billion over 3 years.
Data released by the Central Bank of Egypt showed that the total lending granted by banks to the family sector amounted to £ 610.229 billion at the end of last December, compared to £ 512.055 billion at the end of December 2020.
Bank lending balances to the family currency in local currency increased by EGP 100,106 billion to EGP 603,298 billion at the end of last December, compared to 503,192 at the end of December 2020, with a growth rate of 19.8%.
Lending to natural individuals rose to £ 601.603 billion by the end of 2021, and total loans granted to banks by banks rose to £ 3.032 trillion by the end of last December.
Walid Nagy, vice president of the Egyptian Land Bank, said that a kind of decline in terms of customer demand within the Egyptian banking sector on all types of individual loan products is expected during the coming period due to the rise in interest rates.
He explained that a number of local banks would introduce types of low-interest personal loans, with the aim of attracting a large segment of customers.
He pointed out that in the coming period, all loan products within the banks will be re-priced, following the Central Bank’s decision to increase interest rates by 1%.
He added that the rise in car prices due to the rise in the price of the dollar and the lack of quantities provided and the rise of the “overprice” crisis will lead to a significant decline in car loans at banks during the coming period .
He said his bank is studying pricing on all types of personal loans, and the new rates will be introduced from next week.
Al-Mal newspaper has an extensive inventory of interest rates on personal loans in 12 banks operating in the local market.
The survey showed that the Egyptian Arab Real Estate Bank and the Abu Dhabi Commercial Bank offer the lowest interest rates on individual loans in case clients transfer their salaries to the bank.
The interest income of the largest private banks operating in the local market (the Commercial International Bank) varies from 14% to 23%, depending on the value and term of the loan.
On the other hand, Banque Misr, the second largest state bank in the market, offers an interest rate on personal loans at the level of 17.5% when the salary is transferred, and 20.5% if the client is an independent person.
At the level of interest on personal loans, the Arab African International Bank offers an interest rate of 16% to category “A” companies in the event of salary transfer, and the bank grants its loans with interest rates ranging from 16.5% up to 21% if the company’s assessment is “B”.
While the United Bank grants personal loans to customers at an interest rate ranging from 14.5% to 16.5% in the case of salary transfers, according to the company’s rating within the “A” or “B” coded companies, and loans with an interest rate of 16.5% in the event that the client does not transfer the salary to the bank.
On the other hand, the Export Development Bank of Egypt offers personal loans with interest rates ranging from 16 to 16.75% in the case of salary transfer, and interest rates ranging from 19% to 20.25% if the client does not pay the salary to the bank does not transfer.
While the Bank of Alexandria provides its personal finances to customers with interest rates ranging from 15% to 20%, depending on the company’s rating, whether limited or not.
To get the client a personal loan from the banks, he needs a statement of monthly income, a copy of a national ID card, an application for the loan and a recent proof of use that is not older than 3 months is not, if.
Interest rates within 12 banks
|the bank||Nature of guarantee||Advantage|
|Abu Dhabi first||salary guarantee||18% decrease|
|Free business||exceeds 22%|
|Cairo||Class A with salary transfer guarantee||18.5 to 20|
|Class B with salary transfer guarantee||19.5 to 20.5|
|Abu Dhabi Commercial||salary transfer guarantee||14 16.5|
|Without salary transfer||16.5 19|
|Egyptian real estate||salary transfer guarantee||14 16|
|Without salary transfer||15 16|
|Suez Canal||salary transfer guarantee||17|
|Without salary transfer||19|
|export development||salary transfer guarantee||16 16.75|
|Without salary transfer||19 20.25|
|Arab Investment Bank||salary transfer guarantee||15-16|
|Without salary transfer||16.5 17|
|international trade||salary guarantee||14-23|
|African Arab||Class A with salary transfer guarantee||16|
|Class A without salary transfer||16|
|Class B with salary transfer guarantee||16.5|
|Class B without salary transfer||21|
|Class C with salary transfer guarantee||17|
|Class c without salary transfer||19.5|
|Alexandria||fixed interest rate|
|United Bank||salary transfer guarantee||14.5 for class A 16.5 for class B|
|Without salary transfer||17.5|
Source: Customer Service Centers and Banks’ Websites
preparation – money