Abdullah Ghurman Okaz/Saudi Gazette JEDDAH — Loan brokers lure clients into paying off their debts and reschedule their payments for a nominal fee. As more and more Saudis take out loans, such brokers have become more widespread, posting flyers advertising their services all over the city with claims of easy solutions to loans. In reality, brokers put a further burden on their clients while making hefty profits for themselves. Ali Aseeri spoke about his experience with a broker. When Aseeri approached a broker, he was asked to find out the remaining amount he had to pay to the bank. Aseeri contacted the bank and found out he had an outstanding debt of SR70,000. Believing the broker would pay off the debt for a nominal fee and allow repayment in easy installments, Aseeri took him to the bank. However, the broker asked the bank to grant Aseeri another smaller loan from which he would net a SR15,000 commission. “I asked the bank to cancel the request for a new loan as I refused to pay SR15,000 to the broker and commit myself to installments that may last for five years or more,” he said. Saleh Al-Qahtani said brokers promote their services in a very attractive way to lure people in. When Al-Qahtani approached a broker, he was told that he would be sold three cars and that he had to sign a document pledging to pay off his loans within two years. The broker told Al-Qahtani he would then resell the same cars back to the car agency from which he bought them from at market prices that were SR7,000 below the purchase price. “He said he would then pay off my debt to the bank and put me on an easier payment plan but I refused the offer and canceled the deal. Banks are a much better option when it comes to loans as they only charge 5 percent interest whereas brokers charge 25 to 50 percent,” he said. A bank official who spoke on condition of anonymity said banks are committed to the regulations of the Saudi Arabian Monetary Agency (SAMA), where a borrower has the right to pay off his debt in one lump sum or via monthly installment payments. A source in the Jeddah Municipality who spoke on condition of anonymity said the municipality routinely removes the ads and flyers that promote the services of brokers. “The municipality is keen on maintaining a civilized appearance of the city. Unfortunately, penalizing these brokers is not the municipality's responsibility even though they engage in illegal practices,” he said.
