Sakan Finance, an Egyptian joint stock company, expects to issue EGP2 billion ($365 million) of mortgages within five years, more than half the country's current total, thanks to housing demand in Cairo's suburbs, its chairman said.

In addition to helping more people buy homes, a robust mortgage industry would boost the construction sector and create financial instruments for people building up pensions or seeking other long-term returns, analysts say.

Mortgages in Egypt represent well under 1 percent of gross domestic product (GDP), partly because of a complex property registration process that makes it hard for lenders to secure the right to sell a property in case of default.

'If we had a speedy process...I'm sure this company in five years can multiply the 2 billion by 10,' Sakan's chairman Fathi El Sebaie said in an interview.

'The demand is there, and the capacity is there, and the units are there. But it takes a long time to finalise one transaction.'

The level of mortgages in Egypt compares with over 50 per cent of GDP in Cyprus and more than 80 percent in Britain in 2008, according to the European Mortgage Federation.

Sakan, which means 'housing' in Arabic, is starting with 150 million pounds, making it the second highest capitalised mortgage company in Egypt, the company said. It plans to issue its first loan next week.

The firm expects Egypt's National Housing Project, a state-run initiative that encourages private investment in budget housing and subsidises low-income buyers, to fuel demand for mortgages in Cairo's new suburban cities, Sabaie said.

Next year the company's loans are expected to average 650,000 pounds, but this could change as it adds products for poorer home buyers, he added.

'There's a huge demand, and it will remain at least for the coming 10 years, mostly in the below-average or middle-average income people,' Sebaie said. – Reuters