The Ills Of Overspending: Saudis Racking up Huge Debts From Which There Is Little Escape
25 May 2016
By Tariq A. Al-Maeena
As more and more Saudis become urbanized, they will be spending more in order
to meet the demands of their new lifestyle. From new home loans to car
payments, credit card installment payments for furniture and other goods and
personal loans taken out to pay for weddings or vacations, there are
indications that Saudis and particularly the young have increasingly turned to
borrowing to pay for their needs.
This has led to an increase in the debt to income ratio among families who
find themselves quickly overextended and with not much recourse except to keep
borrowing to stave off the inevitable. It is this path that eventually leads
to a heavy toll on the family and to financial bankruptcy which can lead to a
stiff jail sentence. Perhaps the biggest factor that leads to financial ruin
is that many Saudis have been ill-prepared in the areas of budgeting and
spending. Managing their finances is not something they are good at, resulting
in a whirlwind of financial transactions with very little thought given to the
Some rely on the safety net of family support to bail them out while others
believe that somehow the income from their jobs will get them through. Others
simply ignore demands from creditors to pay back what they owe and avoid
contact with them whenever they can. With prices rising on most consumer goods
and services, managing money has become harder than ever and a lack of
budgeting coupled with uncontrolled spending can quickly lead to the path of
rising debts and financial disaster.
Credit cards have made it easier for many who are ill-prepared to handle
credit responsibly to rack up huge debts from which there is little escape as
interest charges compound the amount owed and just paying the minimum can
ensure a lifetime commitment to debt at the hands of the issuing banks.
Ali Shah, an activist for humanity and operating an NGO out of Riyadh says:
''In a nutshell we live in an era of deception. Criminals persecuting innocent
people. I wish we could jointly work on this. Locking up debt defaulters and
people who are broke in jails has become common and ineffective. And the
reasons for defaulting are never investigated or countered properly.
''I have a friend in a Saudi jail. He was charged with owing SR 1.3 million
yet he is innocent and there is evidence to prove it, but he has been in jail
for over two years now. These pointless inmates are costing the government
billions of riyals. SR 4,000 to SR 5,000 per prisoner per month. Why? I
checked up on his case with the police. There were in fact two others locked
up under similar charges and who have no cases against them. But they were
fortunate to be released under a government pardon. ''Those who have been
legitimately locked up due to debt are not in a position to pay it off in jail
cells. Why not free them and ban them from travel while they work and pay off
their debts. Imagine how much money the government would save, which could be
used for programs to educate people of the evils of debt.''
Ali Shah makes a lot of sense. A person locked up is in no position to pay
back what he owes. Banning him from travel while he fulfills his credit
obligations is a good start. And for the government, the money saved could be
used as he suggests on programs to educate the youthful masses.
Meanwhile, one should try to stick to the old saying as much as possible: If
you don't have the money for it, then you probably don't need it.
The author can be reached at email@example.com. Follow him on Twitter @talmaeena