I have written before calling for a bigger role and a larger space for this bureau. The latest such report tackles the consumer debt. Each time such reports are out I ask myself the same question about the role of banks in society and their ability to chain the citizen with high interest rates and difficult conditions. These are steel chains under which the citizen cannot breathe without first satisfying the lender.
The latest report made me ask this question: How many citizens are indebted to the banks ?
The report said the number of citizens who have taken out loans (banks call them financing arrangements) has surpassed three million (customers, in the language of the banks). Yes, three million citizens waiting to pass their monthly salary to the banks. The monthly installment consist of compounding interest, which adds to the pains of the citizens. This simply means there are a large number of Saudis who are in the clutches of lenders who can control their lives. The lenders have the authority to prevent the citizens from travel, communications and even celebration. I would not be surprised if the banks drafted a law that prevents the citizen from breathing if he fails to make his monthly minimum payment. The law supports lenders and ignores borrowers.
Let us go back to the number of three million “customers.” With simple analysis of the data from the Department of General Statistics I tried to figure out the exact number of borrowers and their ratio to the entire population.
According to the 2010 census, there are 18,707,576 Saudis, including 6,959,218 who are less than 15 years of age, representing 37 percent of the population. Most of the citizens in this category are students in elementary and intermediate schools. If we add to them the secondary and university students, who number 2,124,310 according to the figures of the Ministry of Education, the number of students who are not qualified for loans is more than nine million. We also have 654,765 Saudis who are above 65, representing about four percent of the population who are also not eligible for bank loans.
We now arrive at the most important figure of 8,969,283 Saudis targeted by the predatory lenders. If we deduct from this the unemployed — about two million according to the Labor Ministry — the number of the citizens who are actually qualified for bank loans is 6,969,283. Out of this number there are three million borrowers, which is 43 percent of eligible borrowers. This is a serious indicator that suggests adverse implications for the Saudi economy. This number may grow further with more graduates joining the labor market. The banks will prey on them as well.
Also keep this in mind: These loans don't even include those taken out by small and medium Saudi companies.
