60,000 Saudis unable to repay their debts

February 6, 2013

60000_Saudis

Jeddah, Feb 6: About 60,000 Saudis are unable to pay off their loans, said Abdullah Marei bin Mahfouz, chairman of the Jeddah branch of the national committee for the care of prisoners and their families.

Bin Mahfouz said that currently about 300 Saudis are imprisoned in the Kingdom who are unable to settle their bank debts. In addition, about 500 prisoners are unable to pay off credit card debts, and car installments.

Between 2009 and 2011 the increased effectiveness of the payment system — which protects the rights of banks — contributed to lowering the number of people who borrowed money to buy consumer goods, he said.

“I think Saudis are becoming more cautious about getting indebted due to the strict procedures that banks are following. Still, too many Saudis make debts to fund their summer vacation or to buy a luxurious car,” he said.

He added, “The majority of Saudis who are unable to refund their debts, start looking for another source of money, like car companies. They buy two or three cars on an installment system. Then they sell these cars for cash. In most cases the borrowers are unable to refund the car installments.”

According to Bin Mahfouz, sometimes husbands make their wives borrow money for them.

“We currently have six women in prison that were unable to repay their debts. They work as teachers and their husbands forced them to take out bank loans, knowing they would be unable to refund it,” he said.

The bank system is extremely strict in collecting the debts on time.

“When the money is not repaid in due time, the bank freezes the account, stops all electronic transactions of the debtor, and then sends them notifications through the police department,” said Bin Mahfouz.

He added, “Most convicts who are in jail because they couldn’t repay, are Saudis. Expatriates are committed to settling their debts. There are a few Filipino debtors in prison. These are locked up because of credit card debts for amounts starting around SR 10,000. In contrast, Saudis debtors in jail run debts from SR 100,000 and more.”

The Saudi Arabian Monetary Agency (SAMA) recently issued a report on consumer debts. It said these reached SR 246.9 billion in the first quarter of 2012. Compared to the same period in the previous year, the number was up by 19 percent.

SAMA had warned banks against rescheduling unpaid debts of individuals, saying that 45 percent of the debts should be repayable within three years.

Saudi Banker Fadhel Albu Ainain told Arab News that the ratio of consumer debts is high; many people are in debt. He expected the ratio to decrease with the entrance of the mortgage law.

“In Saudi Arabia the rate of consumer debts, used to buy consumer goods, is estimated at about 75 percent. This is unhealthy for the Saudi market. A healthy market would show that most of the loans are used for acquiring stable commercial investments and real estate. Unfortunately, most of the borrowers are employees whose their salaries can’t cover these loans,” he said. “The problem in Saudi Arabia is that people who earn a low wage often tend to incur debts to live a luxurious life.”

Albu Ainain is opposed to increasing the payment period to more than five years.

“Some people are now calling for expanding the debts repayment period to more than five years. There are also calls to increase the maximum amount people can borrow. This is would increase the size of loans and weaken people’s ability to repay their debts,” he said.

Comments

Shana
 - 
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KT
May 18,2020

May 18: As the UAE authorities have asked all residents to avoid gatherings, it is clear that - for the first time - it's going to be a #StayHome Eid. But experts say that although it will be different, the celebration will be just as meaningful.

It is important to remember that the Eid prayer can be performed at home either individually or with family members under the sane roof, said Dr Mohammed Eyada Ayoub Alkobaisi, a Grand Mufti with the Islamic Affairs and Charitable Activities Department in Dubai.

Dr Alkobaisi said this prayer is a highly recommended Sunnah or practice urged by the Prophet Muhammad (Peace be upon him).

"Eid Prayer must be performed openly, unless we are prevented for an acceptable reason, such as fear for self, wellbeing, property, etc." Under the current circumstances, prayers can be offered from home, he said.

But what the faithful will likely miss is listening to the khutbah or the sermon of Eid with a crowd. The sight of people pouring out into the streets and coming together for prayer and worship would not be unfolding this time.

Dr Sheikh Mohamed Ashmawy, an Islamic researcher, said that in this time of Covid, doing away with several Eid traditions would be necessary for everyone's safety.

"The ban is is line with the ongoing preventive measures to curb the spread of Covid-19," he said.

However, it doesn't mean people can't celebrate and exchange heartfelt greetings, he added.

"We can greet each other remotely on the phone or via social media networks."

Islamic researcher Sheikh Mohamed Wasfi said audio-visual smart apps have made communication much easier, even bringing people closer than before.

"Of course, families and friends wish to hug, shake hands and see each other personally, but this will be a big risk these days," he said.

Sheikh Asadullah Del Mohamed, an imam, reminded that banquets, parties and visits are discouraged to avoid crowds and gathering.

Recently, 30 people from two families tested positive for the virus after breaking social distancing rules and holding a gathering.

Faithful's sentiments

Ibrahim Abdelkader, an Egyptian auditor, said that while it would be sad to spend Eid Al Fitr at home, he understood that it is for everyone's safety.

"Better to stay home than be sorry," said Ahmad Jamil, a Syrian resident.

Rashid Saeed, an Emirati national, said people are advised to just check on each other by phone or video and voice call apps.

"While Eid prayers is banned in congregation, it's not acceptable at all for some people to carelessly gather and exchange visits," he said.

Abdullah Al Saleh, an Emirati national, said he and all his relatives used to gather for breakfast after the Eid prayer - but this time, they are ready to do it in their own homes.

Mohamed Ibrahim, another Emirati, said he would surely miss seeing his kids happily prancing around with their new clothes and enjoying the outdoors like every year.

"But, I agree as it is for their health, safety and wellbeing," he said.

THINGS TO REMEMBER IN CELEBRATING EID THIS YEAR

>Perform the Eid prayer at home, individually or with family members living with you

>Exchange greetings with loved ones and friends via phone calls or online

>No hugs

>No handshakes

>No gatherings

>No visits to other homes

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News Network
May 31,2020

Dubai, May 31: As many as 84 beggars have been arrested in Dubai during the Eid Al Fitr holiday, the Dubai Police have said.

The arrests were carried out as part of their anti-begging campaign to prevent begging during the holy month of Ramadan.

Some illegal vendors, too, have been arrested in different areas of the emirate, the police added.

Colonel Ali Salem, Director of the Infiltrators Department at the Criminal Investigations Department of Dubai Police, said that the campaign aims to maintain the safety and security of the society, adding that the campaign was successful and helped reduce the number of beggars across the emirate.

He called on the public to report begging activities to the number 901 or the Dubai Police app.

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News Network
May 5,2020

Dubai, May 5: A Saudi ministerial decision issued on Monday allows companies in the private sector to reduce salaries by 40 per cent and allows termination of contracts owing to the economic hardships resulting from the COVID-19 pandemic, according to daily newspaper Al Sharq Awsat.

The new decision was still not published by the cabinet according to the newspaper.

The decision which the newspaper saw a copy of was signed by Saudi Ministry of Human Resources and Social Development to regulate the labour contract in the current period, allows employers to reduce the employees salaries by 40 percent of the actual effective wage for a period of 6 months, in proportion to the hours of work and allowing the termination of employee contract after 6 months of the COVID-19 circumstances.

The new decision has also included a provision in which the employer would be allowed to cut wages even he or she benefits from the subsidy provided by the goverment, such as those for helping pay workers wages or exemption from government fees.

The decision also stressed that employers are not allowed to terminate any employee, unless three conditions are met.

1.            First the passing of six months since the measures of salary cut has been taken

2.            Reducing pay, annual leave and exceptional leave were all used

3.            Company proves that its facing financial troubles due to the circumstances.

The memo, which goes into affect as soon as its published in the government’s official newspaper, ensures that the employee will receive his/her salary if on annual leave within the period of 6 months.

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