The latest survey conducted by Riyali Financial Literacy Program, launched by SEDCO Holding Group in collaboration with Souqalmal.com regarding the personal finance culture in Saudi Arabia, showed that more than 86% of the respondents have suffered from some form of financial distress. This high percentage sheds light on the importance of spreading financial awareness to manage a stable financial life. The survey also showed that most of the financial commitments that the participants failed to fulfill were finance installments (44%), followed by borrowing from friends and family (34%), and then credit card payments (22%). Such a high percentage of failure to fulfill debt obligations usually has several consequences, including a bad credit history that affects the borrowers' ability to take other financings. In addition to that, the survey highlighted another noticeable problem, which is the high debt burden ratio where monthly installments of 42% of the participants exceeded 60% of their monthly salary. This ratio is a major factor in determining the eligibility of an individual to receive finance in order to avoid burdening the customers with debts beyond their monthly repayment ability. Amr Banaja, Vice-President of Marketing and Corporate Responsibility at SEDCO Holding Group, said: "We have provided through the Riyali Program, a wealth of financial awareness courses and tools to help individuals act responsibly with respect to borrowing and credit history, in addition to saving and planning for investment. The optimal method of personal financia management requires self-consciousness and the individual's desire to develop the financial awareness. We, at Riyali, provide this for the sake of a better future and a more stable life and happiness of the individual and community." In this regard, the Saudi Arabian Monetary Agency (SAMA) has set the limit at 33% for the monthly debt burden that a customer can afford, to be able to successfully pay off debts. The debt burden ratio might vary from one customer to another based on the financial products held. The survey has also showed that 57% of the respondents had their finance application rejected. The key reason was the high debt burden ratio of the customer that exceeded the specified percentage, which stresses on the importance of maintaining a good credit report. The second most common reason was the company where the customer works being not listed with the bank. SAMA is always seeking to support the financial stability of residents through its policies aiming at keeping pace with the latest economic developments where it has proven its unremitting efforts, where a recent report showed that the appropriations allocated for covering bad debts exceeded 165% of total non-performing loans. The Founder & CEO of Souqalmal.com, Ambareen Musa, said: "Souqalmal.com helps consumers to compare the financial products offered by local banks, for them to apply to the products that best meet their needs. This contributes towards increasing the level of financial awareness of individuals and helps in bringing a level of transparency to the marketplace. Financial education has always been an integral part of our presence." This is where the role of Riyali Program and Souqalmal.com becomes crucial in promoting financial awareness and providing individuals with the knowledge required for proper financial planning and management. — SG
