The Public Investment Fund (PIF) has agreed to contribute 20 percent of the SR2 billion capital of the new home finance company, Khaled Al-Aboodi, CEO of Islamic Corporation for the Development of the Private Sector (ICD), announced here Sunday. This represents the single largest investment in a mortgage company in the history of PIF, he said. The Islamic Corporation for the Development of the Private Sector (ICD), a member of the Islamic Development Bank, is currently attracting sponsors for the new home finance company. Investment deadline ends this month. Al-Aboodi said the company is being established to facilitate home ownership at affordable financing options. According to estimates, the demand for new housing in the country is 150,000 units per year over the next 10 years. Mortgages currently make up only 1 percent of bank assets, underscoring a large funding gap for home financing in Saudi Arabia. ICD and PIF have finalized the company's formation committee to prepare documents, design action plan and formulate internal regulations in cooperation with Capitals Group International (CGI), the manager of the new company. Over a period of time, representatives of parties subscribing to the new company's capital will join the formation committee. The company's official launch is scheduled this year. The mortgage company will open three main branches in Jeddah, Riyadh, and Dammam. In November 2008, the Saudi Home Loans company (SHL), an Islamic mortgage lender, said that only 30% of Saudi nationals owned their homes, although official estimates tend to be higher.
