Up to 24% behind on loan repayments in Saudi

LOAN DEFAULTS: Borrowers in Saudi can not repay their debts. (Getty Images)

At least a quarter of borrowers in Saudi Arabia have fallen behind on repayments, according to the Saudi Credit Bureau (SIMAH).

The possible bad debt is affecting 200 financing institutions across the Kingdom, 85 in Riyadh alone, said Nabil Al Mubarak, chairman of SIMAH, the Kingdom’s first comprehensive consumer credit bureau, which bases its data on consumer credit information from 10 commercial banks.

Most of these financing institutions are not registered with SIMAH, but they are monitored by the Ministry of Commerce and Industry, Al Mubarak said in Saudi daily, Saudi Gazette.

The volume of consumer credit in Saudi Arabia fell to SR178.9 billion ($47.7 billion) by mid-2008 from SR185.4 billion ($49.5 billion) a year earlier, after Saudi Arabian Monetary Agency (SAMA) restricted consumer credit - reportedly because consumer loans were being used for speculative trading on the stock market.

Al Mubarak said financing institutions not registered with SIMAH and SAMA did not follow SAMA’s financial regulations, including its interest rate.

He did not rule out the possibility of unregistered financial institutions being involved in money laundering operations.

Print | Email | Discuss this article

| Share |

READERS' COMMENTS

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Enter the words above *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM