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Local banks are scrambling to finance durable goods

Sunday 29 July 2018 06:26 PM

Egyptian Banks
Egyptian Banks

By Suhair Mohmed
In light of surging prices of durable goods, notably  the electrical appliances which spiked since the flotation of the local currency, consumers scrambled to tap banking financing.
in addition to those financing solar-powered houses, banks financing durables, such as furniture, electrical, household appliances and electronics, have mushroomed .
In a survey conducted by Al-Mal newspaper, nine banks turned out to be providing programs inclusive of loans extended to clerks at state-owned or privately owned companies as well as to freelancers.
Loans vary in accordance with minimum incomes, interest rate, repayment period, requirements and documents and the maximum loans that are made available by the banks.
The Egyptian Gulf Bank topped the list of lenders with 29% interest rates for loans extended to durables, against rates ranging between 19% to 24% whereas Banque Du Caire gives 13.5% interest rates to clerks working at state-owned companies, the least among lenders.
 Misr Banque provides the longest repayment periods, 8 years, to public-companies employees and the Egyptian Agricultural Bank provides 24-month repayment. Requirement of minimum income varies from one bank to the other on account of  the targeted category. Banque Du Caire required the lowest salary  from public clerks, whereas Baraka Bank demanded a minimum of  EGP3000 for employees and EGP5000 for freelancers.
A significant gulf between banks as regards the maximum financing amount was revealed by the survey with EGP1mln loan  extended by Banque Du Caire, EGP10,000 by Emirates NBD, and EGP25,000 by the Egyptian Agricultural Bank.
The banks require clients to submit  a pricing list of durables whether supplied by  department stores in agreements  or not  with  the banks.  
On the same vein, local banks, including the National Bank of Egypt, the Commercial International Bank, Misr Banque and QNB Alahli Bank,  are competing over financing durables on installments via credit cards for 6-to-12 months repayment schemes.  
While banks are expanding on providing durables financing, the Arab Investment Bank and Al Ahli Bank of Kuwait decided to halt this kind of funding as they keep promoting personal loans.