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Young and in debt

Young and in debt

More than a quarter of Arab youths owe money, mostly in the form of credit cards and personal loans. But how did they borrow so easily?

March 7, 2010 6:40 by



The debt results are more understandable given the high levels of spending among the Arab youth, with over half of the respondents saying that they spend money on clothing, mobile phone calls and dining out.

Only 20 percent of those surveyed said they save money. The survey found that the main concern among youths is the rising cost of living in the region; to keep up their lifestyles, many youths now have to spend more money, and in turn, take on more debt.

The ease with which the youth population seems to have got these loans is surprising, especially considering that the survey was conducted in October last year. While the lending situation has eased up a bit now, last year in places like the UAE banks imposed extremely tight restrictions on who was permitted to borrow money.

According to recent statistics, loans in the UAE grew by just 2.4 percent in 2009, compared to an annual growth rate of about 35 percent between 2005 and 2008. At the end of 2008, many banks operating in the UAE, including Lloyds TSB and HSBC, also raised minimum salary requirements for personal loans. So how is it that these young people could borrow so easily?

In places like Saudi, one can attribute the debt to the rising number of credit cards. According to the Saudi Arabian Monetary Agency (Sama), the number of cards issued in the Kingdom almost doubled from 6.4 million in 2004 to 12.6 million in 2009. The number of point of sale terminals, through which card transactions can be made, has also risen from 35,521 in 2004 to 63,870 in 2009.



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3 Comments

  1. Omani on March 7, 2010 7:04 pm

    consumerism means that the latest mobile , and a new car is how many have accumulated debt

     
  2. Miss Anne Thropic on March 8, 2010 10:56 am

    Very sad. The concept of living within one’s means is lost on nationals and expats alike in the Arab world.

     
  3. Ronald on March 10, 2010 10:28 am

    I have spent my entire teenage hood and early twenties dodging offers for auto loans and credit cars and stupid personal loans.

    Kids and youth tend to want to have the ability to have everything, and a credit [card] gives them just that. they are too young to understand the ramifications down the line.

    i dont blame the young people, they are foolish by nature, it’s the banks that should be blamed, and the financial arm of the government for carring more on the end year bottom line than the financial well being of its young subjects. national or otherwise…

    every time there is an advert for some type of credit, banks, and their culprits the ad agencies go out of their way (sometimes genius) to make that taking on a debt and repaying it is as easy as 1 2 3… the pages of litigation, rules in fine print are rushed over by bank employees so that they can meet their quotas. i have yet to meet a banking employee that doesnt try to offer me some type of useless loan pledging that it is very easy and i wont feel the difference…

    Rubbish… although unfortunately it seems like its natural today to live in debt… it is not if you dont have the money for it, it means you have not earned it…. that is the main problem…

    the concept of earning something after hard work has dissapeared.. the bottom line it seems is what matters

     

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