JEDDAH — A number of economists said Saudi families are taking out loans because they believe it to be an easier option than saving. The number of borrowers in the Kingdom has reportedly reached 3.5 million and the volume of personal loans has exceeded SR400 billion. Dr. Issam Khalifa, member of the Saudi Economic Association, said recently a culture of extravagant spending has become dominant among Saudi families from all income groups, reported Al-Madinah. He said: “This often leads to a cycle of spending excessively at the beginning of the month and ending up broke at the end of the month. “We do not deny that the media has pushed the Saudi family into a lifestyle it cannot sustain. “The head of the family can no longer meet the needs of the family without taking loans. “There is no Saudi citizen who does not pay monthly installments to settle some loan that is a burden on him for months or years.” This kind of consumption is an economic problem due to the many financial and social risks, including depleting the family's income, said economists. Also, many heads of families have changed from becoming savers to borrowers. Meanwhile, the percentage of consumer loans accounts for more than 80 percent of personal loans. Statistics have shown that 26 percent of people save money regularly, while 89 percent of Saudi nationals are borrowers. Borrowing from banks is more active during the summer months to finance travel and Ramadan and Eid spending.
