About 63,000 Saudis face the possibility of imprisonment in the coming two years if they do not settle their outstanding debts with lenders, a source with the Committee for the Care of Prisoners told the Saudi Gazette. The source, who has access to SIMA (Saudi Credit Bureau), said outstanding private debts as of the end of the first quarter of 2011 exceeded SR3.5 billion. Abdullah Bin Mahfouz, chairman of the Committee for the Care of Prisoners in Jeddah, said: “A detailed study carried out in collaboration with SIMA showed that most of the debtors had to borrow to stay afloat after the collapse of the stock market in 2006.” The Saudi stock market bubble that deflated in 2006 showed TASI, the Saudi Stock Market parameter, falling from a high of 21,100 points to less than 4,800 with financial assets losing more than 53 percent of their trade value. Asked if debtors had shown good faith in dealing with their financial difficulties, Bin Mahfouz said, “Yes, but their declared assets and whatever financial support they garner from family relatives and friends are not sufficient to bail them out.” Current directives and processes in dealing with overdue personal debts are simple yet do not offer much hope. A debtor when called into a civil rights department faces the choices of immediate settlement of debt, bringing in a co-signer to pay on his behalf or being jailed. Bin Mahfouz said that the social and family consequences are grave. The Shoura Council has been approached to take up the matter at the national level to find other ways to solve this problem. “We suggested that institutional lenders such as banks, installment businesses and authorized car dealers be allowed to gradually deduct outstanding private debts out of Zakat dues.” According to sources, total private debts including industrial and commercial could reach a quarter of a billion riyals with consumer loans exceeding SR100 billion by mid
