JEDDAH: Eid shopping frenzy and growing inflation have driven some consumers to a new money-lending service run by housewives. Those running the service don’t give cash but buy household goods for their customers.
Inspired by men in the family who lease cars to close relatives, two women from the Al-Mutari family are making money by giving financial aid for an extra charge.
“I started using my daughter’s dowry money,” said one of them. “My daughter received her dowry more than a year before her wedding. I used 50 percent of that money and started lending to friends and family for an extra charge. When it was time for her wedding I returned the money and a little extra. I had managed to collect enough money to continue my business.”
Um Mussaed, one of the two women, said a contract is signed in the presence of witnesses. “With all the legal precautions in place I still don't give loans to people I have no connection with or are not guaranteed and vouched for by people I know and trust,” she said.
Most of her customers are relatives in the tribe. But other people also seek financial aid from her.
“I receive more customers during the month of Ramadan than any other month,” she said. “Most people tend to give their homes a makeover during Ramadan. So cash is needed to pay for the new furniture and I offer the best and fastest service possible. People come for everything: furniture, gold, home appliances and even mobile phones.” For each SR1,000 she charges SR300 extra.
These women said they sought religious counsel to ensure that their business is permitted in Islam. They were advised that their lending is permitted if they make the purchases of the items, and then sell them to their customers with the markup, rather than lending the cash and charging the fee based on the amount of money loaned.
Even younger women are joining the new friendly neighborhood money-lending service. After 26-year-old Um Khaled’s husband died two years ago. He left her with three boys and approximately SR4 million in inheritance money. With no professional skills to successfully operate her money she decided to take up her relatives’ money-lending profession.
“Paperwork is done and is enough to protect our investments but the process of getting your money back in the legal system takes too long,” she said. “So one is very careful to whom he lends money.”
