RIYADH: An economist has criticized the loan resolution approved over the weekend by the Ministry of Housing and the Real Estate Development Fund (REDF).

The REDF provides medium- and long-term loans to individuals or organizations for private or commercial housing purposes.

In his Twitter account, Abdulhamid Al-Omari criticized the brokers and traders for the resolution, saying that it was approved in a hurry without due consideration for public interest.

“The loan as mentioned in the resolution will take you farther than you think down the road to poverty and your salary will be subject to it until you retire or even die,” Al-Omari said.

He said that the burden of the loan is just too much. Illustrating his point, he said: “If your income is less than SR15,000, with a 3 percent interest rate, you’d be paying a total of SR725,000.”

This means that the borrower shall have paid a total of SR225,000 in interest which Al-Omari believes is way too much and beyond the reach of the ordinary borrower.

“In amortizing the loan, you might be forced to take another loan from other financial institutions such as the World Bank to meet the family’s daily needs and other expenses,” he said.

He also noted that during the announcement of the loan plan, it was said that about 300,000 individuals could avail themselves of it. “If all these people do take loan, it would mean a lot of money would be paid in interest,” he said, adding that he’s skeptical about the loan package.

“I know it’s for the benefit of the traders and brokers. More importantly, all things are moving for them!” he said.