The Saudi Arabian Monetary Agency (SAMA) said that the size of personal loans by the end of the third quarter of this year has increased to over SR239.5 billion, SR136.5 billion of which are long-term loans while SR62.4 billion are medium-term loans and SR40.7 billion are short-term loans. According to SAMA, personal loans are again up following a temporary decline in the second quarter of this year, when the total value was SR212.9 billion against SR215.1 billion at the end of the first quarter of the same year. Short-term loans are payable in 12 months, medium-term loans in 1-3 years and long-terms in over three years. The share of real estate loans does not exceed SR27.8 billion while car and equipment loans hit SR64.2 billion and other loans totaled SR144.9 billion. Essam Khalifa, member of the Saudi Economics Society and the Saudi Quality Society, said some Saudi families lead lifestyles that are not commensurate with their income and therefore resort to borrowing personal loans. He attributed the increase in the number of borrowers to 2.5 million to the fact that many families lead an ostentatious lifestyle and emulate the living standards of rich people. “Most breadwinners who cannot get loans apply for credit cards. They use them negatively and result in the accumulation of debts, making a dent in their savings. Most credit card users end up selling personal property to pay off their debts.” The negative effects of personal loans hit not only families but also impact the national economy, he said. These loans contribute to creating a consumer's economy that ignores productivity and development of all economic aspects, he explained. __
