The number of personal loans given by banks in Qatar over the past eight months has fallen 18 percent, a new report by the QNB Group states.
The drop is due largely due to two reasons, according to the report.
The first is the setting up of a centralized credit bureau by Qatar Central Bank, which assesses the creditworthiness of potential borrowers.
The second is QCB’s tightening of lending norms, which it did in April of 2011 following an outcry over the rising debt of Qataris.
Some 75 percent of nationals are in debt, according to the 2011 National Development Strategy.
Most owe an average of QR250,000. Qatar hopes to halve the number of indebted nationals by 2016, the report states.
In 2011, QCB placed a ceiling of QR400,000 on personal loans to expats and dropped the loan limit for nationals to QR2 million from QR2.5 million.
But that still comes with a generous repayment period of six years.
Meanwhile, lending to government and quasi-government agencies rose an astonishing 35 percent to QR201.3 billion ($55.3 billion) from January to August of this year, the QNB report states.
That sector now gets 42 percent of the total number of loans issued by banks, nearly double the rate from five years ago.
According to the report:
Financing of large capital investments in developing the country’s infrastructure has been the key driver of public sector loan growth.
Government agencies, semi agencies and large corporate, which are engaged across economic sectors, are expected to continue to be the main driver of loan growth given the large development program and infrastructure projects underway and to be implemented in the short to medium term.
Thoughts?
Credit: Photo by Omar Chatriwala