The typical Saudi doesn’t know how to budget, an article in the Arabic Al-Riyadh newspaper claims. The piece (translated by Saudi Gazette) notes that consumer debt now represents 84% of banks’ portfolios, a ridiculously high number. The extension of loans to consumers living beyond their means is a double-whammy because the money lent by the banks is not available to small businesses. This is not a sign of health in the Saudi economy.
We are extravagant, consumeristic people
Abid Khazandar | Al-Riyadh newspaper
In a news item published on Jan. 13, Al-Riyadh newspaper quoted reports by the Saudi Arabian Monetary Agency (SAMA) that said the accumulative debts on citizens to the banks resulting from personal consumer loans and credit cards have risen to very high levels.
The reports said the consumer debts reached SR246.9 billion in the first quarter of 2012, an increase of 19 percent over the same period the previous year.
According to an economist, the consumer loans represented about 84 percent of the banks’ portfolios. To me, this ratio means we are not only a consumer people but extravagant as well. We do not know saving. The Saudi citizen does not confine his/her consumer spending to the limits and boundaries of his/her income let alone saving part of this income to the future when he or she retires and the monthly salary becomes much less.