By Andy Sambidge
Qatar Central Bank figures reveal 7% drop in lending, compared to last quarter of 2008.
Bank lending in Qatar fell by QR15.5bn ($4.2bn) during the first quarter of this year, a seven percent decline from the end of December 2008, a new report reveals.
The total amount of bank loans for the first quarter of 2009 reached QR227bn, compared to QR242.5bn in the final quarter of 2008, the Peninsula newspaper reported.
The drop in lending over the first three months of the year came after the banks tightened their rules on issuing loans for housing, cars, personal use, services, and trade and industry.
According to the latest report from the Qatar Central Bank (QCB), personal loans formed the biggest chunk of all loans in Qatar while real estate loans made up for a total of QR37bn.
"Issuance of loans should be within reason and should reflect the current situation the economy is facing, in all its sectors," financial expert Abdulla Al Khater told the paper, commenting on the reduction in bank loans in the first quarter of this year.
"The economy right now is witnessing a mild slowdown, and therefore the banks’ policies should shift towards minimising this slowdown by increasing loans and not taking a strict attitude towards giving loans, so that the situation won’t reach the point where all industries are faced with lending problems," added Al Khater.
"The Qatari economy is a very stable one, and I hope that banks would reflect that, and not follow the same procedures of being reserved about giving out loans like in the past few months."