
As many residents prepare to escape Qatar’s summer heat and finalize their holiday vacations, Muslim clerics here have been advising travelers to avoid depending on bank loans to fund their trips.
During Friday prayer sermons over the weekend, many scholars warned residents that taking out loans to go on extravagant vacations could cause them to fall into crushing debt, Al Raya reports.
Speaking at the Sheikh Muhammad Ibn Abdul Wahhab (State) mosque, Sheikh Abdullah Al Sada said such debt could spur residents to make other poor choices, including lying and issuing false promises.

If they are unable to pay off the loans, some people may face jail time, he warned.
Instead of financing trips with loans, economic experts suggested taking more affordable vacations, saving up for holidays or only taking out a loan after ensuring they would be able to pay it back, according to Al Watan.
Businessman Mohammad Abdullah Al Obaidly told the newspaper that saving from 10 to 20 percent of one’s monthly income to go on holiday could go a long way in lowering the numbers of personal loans taken out in Qatar.
Figures
However, like in the rest of the Gulf, many residents here struggle to save money, either due to the rising cost of living or because they live lifestyles outside of their means.

When it comes to vacations, Qatari households spend on average QR5,711 a month (11.5 percent of their income), while expats spend about QR1,648 (9 percent) monthly on traveling abroad, according to government figures issued last year.
In recent years, personal loans – including for travel and holiday-related expenses – taken out by both expats and Qataris have also grown, according to Qatar Central Bank data.
This was in part due to the rapid increase in the population, in addition to the low rates that banks in Qatar charge on personal loans, which is from 2 to 4 percent, according to the Peninsula.
And though household income has been growing here, wealth went up six-fold in the past decade while debt increased nine-fold, Credit Suisse reported in 2011.

Debt appears to be a particularly widespread problem among Qataris. The 2011 National Development Strategy (NSD) states that three out of four nationals owe money, with most in the red by an average of QR250,000.
But the report added that the government hopes to halve the number of indebted citizens by 2016.
One way to reduce debt among Khaleejis, according to Mohammed Qasim Al Ali, chief executive of UAE-based National Bonds, should be to tackle the pervasive culture of excessive wealth and love of luxury goods:
“This is one of the root causes of the lack of savings culture in the GCC because people are looked after by their governments with free education, free hospitals and no taxation. All of these contribute to people depending on third parties whether it’s their parents or the government and they get locked into their living standards,” he said.
Thoughts?
Good
People taking out loans to go on vacation? You must be really dumb to do it!
They are really dumb.
Live below your means. That’s better.
Ideally it should be from savings but credit is cheap out here and one might need a short term loan if finances cannot cover the trip it in one go – it’s about managing one’s finances.
QNB offering a loan at 4.5% recurring while my cash earns a minimum of 9% through investments.
Better to travel when one is young and healthy – glad to have seen the world and its been well worth the experience.
The question is: why would you go on a trip that you cannot afford in the first place? If I have enough for a decent trip to Dubai, why would I try to get a loan to go to Bali? If I am that keen on Bali I will save for next year’s trip. It’s about managing one’s finances and living by one’s means.
what sort of investments do u have ?
You have to understand peer pressure these people have to go through, if one can afford to go to a extravagant trip, others would want to do the same , and somehow have to find ways to finance it and somehow brag about it #firstworldproblems
While this sounds ridiculous, I won’t be surprised if this is true, at least for some people.
Do they really need a cleric to tell them that? it’s common sense 🙂
Do obese people need to be told that high calorie food is the source of their problem?
haha
Dukhan here I come again 🙁
Oh they’ll just have another one of those “your loans are forgiven just don’t do it again” days. At least for the locals.
How do you know? Did they consult you with the plan to do this? Oh please enlighten us the all knowing one.
This guy has a deep issue with locals.
He has issues period.
I have issues with people who try to kill me on the roads, who think they’re entitled by birth to treat others as subhuman, who do nothing but expect everyone to bow down to them as superior beings, etc etc. If that encompasses any locals then so be it.
What? you DO have issues.
Are you saying it never happened before?
Deleting this thread for getting off track.
If I may ask Shabina; you may know (or maybe not) that this claim about the government forgiving loans for citizens is just a myth, right?
While some Qataris have often suggested for the government to do so, I really don’t recall that such a thing was ever done here. I have heard about Kuwait doing so on some occasions, but never Qatar.
As such, and freedom of expression notwithstanding, as long as you allow people to post such ignorant and hateful comments, it should come as no surprise that you’ll see responses which you deem to be off track or personal attacks. Just a thought.
Yes it’s odd. Even if the government did write off Qatari loans, who cares. It’s not their money and it doesn’t affect their job. People are quick to judge others even when it has nothing to do with them. Qataris has spent time in jail for debts, no one ever mentions this
How offensive is it when a white person in the U.S. automatically assumes that a black person was accepted into an ivy league college only because of affirmative actions? If only it were true that I can borrow money from the bank and then the government would just pay it for me. Why bother even getting a job?
Yes, I am aware that the government here rarely forgives loans for citizens. Usually the commenters correct each other, and I try to step in as little as possible.
Shabina, I’m not sure if you’re able to do this or not but regarding ‘desertCard’,
i notice many of his comments get deleted for justifiable reasons but if he is this bothersome
why not just IP ban their account or something to refrain them from commenting?
I love the way you hate us.
Oh look, another ignorant comment about locals by you. Oh how horrible it must be for you to live here. I hope the money is worth it.
Deleted for stereotyping.
Mohammed Qasim Al Ali has made a great comment and that solves it all.. Let the Khaleejis be made to face task of living like every human with a common sense. Let them start working no matter the amount of salary being paid, they should be forced by the government to engage in a working life style.. Teach them that business comes before pleasure.. I think it will also help stop the broken homes and the high rates of divorce they witness everyday..
We, I don’t think so. None of those things are related.
MMH, if you said so then so be it…
The total amount of personal loans given to the locals and non-locals in our company is staggering. Yes, some use it to go on holiday…
What loan is that? Does your company offer personal loans? This is weird unless your company is a bank 🙂
My Company offers loans and it ain’t a bank – substantial loans that too for locals
Yes and the banks are at fault here. Once the expat loses their job they call CID and get them imprisoned. Stupid people for taking out such big loans, stupid banks for offering them.
With everything that is going on the world this is the most pressing issue to speak about at Friday prayers?
whats the problem… Qatar Charity will just bail them out?!?!?!
yeah, who cares, the government will always waive their debts with the banks. they are so fortunate to have a government who really cares for them.
that is not caring. It’s called enabling 😛
Government bail out for citizens doesn’t show caring. it promotes financial irresponsibility. I am all for the Government looking after its citizens, Qatari people are very fortunate in many ways and their Government does take good care of them. However Charity’s bailing out people who take out loans to fund a lifestyle they can not afford is a mockery of what charity stands for. You can almost guarantee that the people who are taking out these massive loans to go on extravagant holidays, to buy indulgent cars etc. have not spent any of that money on charitable causes.
In a country where locals have opportunity to earn or borrow such vast amounts of money Financial planning and responsibility needs to be taught. lets hope Sheikh Abdullah Al Sada message has got through to some people – for their own sake.
Are you aware of the cases where QC or other organisations have forgiven loans or are you just insinuating Gareth, because you are looking at it in a very black and white manner. I work in the financial sector and have had significant experience in debt relief.
Firstly, they aren’t all for people who have taken indulgent holidays and cars. In every case, the waived debt is on a party that has no more collateral where liquidation would even change the payment schedule let alone cover the principal, and the automatic repayment amounts are overtaking salaries or pensions.
Secondly, the process to petition for debt forgiveness is long and significant due diligence is conducted to ensure that despite the financial mismanagement of the suffering party, there are other parties, often family members and children in particular that are adversely affected by the debt.
Many times the debt forgiveness is to alleviate the pains that children and family members are feeling due to the mistakes/calamities of their relatives, who weren’t party to the initial loan and did not benefit or consent to it. That is the charity.
here is one example.. there are many more if you would care to look.. i did a very simple search in google news for “Qatar Charity Jail” – http://thepeninsulaqatar.com/news/qatar/336332/charity-collecting-qr1-5m-to-help-indebted-qataris
I am not suggesting that QC are an organisation that do not work towards noble causes, however, my personal opinion is that this is not a ‘valid’ use for charity.
My point was that fiscal responsibility should be taught, I am happy to read that this message is being taught to the community.
The cases that you have pointed out are all individuals who took out loans to fund businesses that all eventually tanked, and are now facing debtors prison, not people who bought Bentley and first class tickets, so I don’t see how this article helps your point that this isn’t charity.
I believe the principle is the same.. that is the first example I found. Loans where taken that they couldn’t afford.. yes the business tanked, but shouldn’t they have has a feasibility study in place, a business plan that would account for the loan? The fact still remains that they where bailed out for irresponsible borrowing.
How would you feel if you gave money to a charity and then found out your donation was being spent in this way?
Again, my point is not about how a charity choose to donate their money (it is my choice to not give to these particular charity’s) but that financial management should be taught, lenders need to be more responsible.
lenders need to be accountable for bad loans
People were aware that their charitable contributions are spent towards bailing out debtors. Have you read the article? In all Qatar based charities, you choose where your contribution goes, or you can leave it to the discretion of the administrators of the charity.
A loan is always a liability regardless of feasibility studies or business plans. It is unfortunate that a bankruptcy law doesn’t exist to protect people who are down on their luck and they face imprisonment for non-repayment of debts, thus the existence of charitable relief.
@JT – just to go back to our earlier conversation i would like to draw your attention to this article in today’s Peninsula
http://thepeninsulaqatar.com/news/qatar/346522/qr6-03m-raised-to-free-11-jailed-loan-defaulters
FYI Gareth; this myth that the government forgives the loans for Qataris, is just that: a myth! If it were true no Qatari would bother to get work, just borrow as much money as you want and have the government pay it for you.
And who is Sheikh Abdullah Al Sada? You understand that Sheikh is a royal title in Qatar, for only members of the ruling family?
I’m a sheik in my house….
does the “common sense” phrase ring any bell?
Lots need a sermon from someone to get this concept? W E I R D !!!
luxurious vacation are for those people who can affords… It still depend on how much is your budget.
*afford
Maybe they should also advise Filipinos and Indians not to take out big loans to buy houses and land back home which takes ten years to pay back at least in a place where you have zero job security. You just end up in jail when the bank calls the police
What’s the issue? The Emir will wipe out all debts at some point, so why not?
Take out personal loan to buy Land Cruiser. Take Land Cruiser to Salwa Road. Sell Land Cruiser for cash. Use cash as holiday spend. Default on loan. Allegedly.