Talaat Moustafa Group (TMG) Holding announced entering into an agreement to establish a mortgage finance joint venture (JV) with GB Capital, financing subsidiary of GB Auto, and EFG Hermes, in a bid to serve Egypt’s growing population of homebuyers, Invest-Gate reports.

The JV is currently owned by TMG Holding, but the other parties will increase the company’s capital to allow each to have one-third ownership. The company will have an initial paid-in capital of EGP 150 mn and is set to rise to EGP 250 mn as the business grows, according to a statement released on April 17.

Chairman of TMG Holding Hesham Talaat Moustafa said the JV aspires to bring to the market housing units with long-term and competitive financing solutions, which would eventually raise affordability and better align the local market’s real estate supply.

“I am particularly pleased to note that the JV will be offering finance solutions for move-in new homes in the existing projects as well as potential developments in TMG’s pipeline. EFG Hermes and GB Capital are longstanding partners, with whom we look forward to doing business for years to come,” he said during the signing ceremony.

Moustafa added that this partnership integrates the expertise and potential of the three parties, as TMG Holding owns 100,000 housing units at its various projects across Egypt. He confirmed that the JV is targeting to fund a portfolio of units worth EGP 450 mn in its first 12 months of operations.

Meanwhile, Raouf Ghabbour, chairman and CEO of GB Auto, explained that the partnership comes within the framework of his company’s plan to expand into Egypt’s non-bank financing sector, while covering mortgage financing, finance lease, and microfinance.

“We are bringing to the market a portfolio of easy-to-access financing solutions that will feature the fastest decision-making time in the industry. We have worked for years with EFG Hermes and are honored to partner with them and with TMG on a joint venture that complements our established, fast-growing consumer, lease and microfinance ventures, and our fleet-leasing solution,” Ghabbour was quoted as saying.

On his part, CEO of EFG Hermes Holding Karim Awad highlighted that the new company will begin operating in May and its brand name will be later announced upon launch.

“With approximately 700,000 people entering the workforce each year, the huge potential of Egypt’s market for home buyers is underserved and under-penetrated by non-bank financial institutions. This joint venture is the natural evolutionary step to help grow the mortgage business in Egypt and expand our non-bank financial services platform, which today includes leasing, microfinance, fintech-enabled consumer finance, and factoring,” Awad elaborated.