Calls to curb extravagant spending by Qatari youth on foreign trips in summer.
The Qatar Central Bank (QCB) is under pressure from various segments of Qatar society to introduce stricter rules for disbursement of personal loans to Qatari youth.
The calls have come to curb extravagant spending by Qatari youth on foreign trips in summer. By proposing stricter conditions for personal loans, the central bank can help to ensure that the loans are used wisely and youth’s do not pile up debt. Some members of the Central Municipal Council (CMC) have suggested that the age limit for a personal loan be fixed from 25 to 30 years.
Qatar’s economy has enjoyed sunny times in recent years due to soaring prices of oil and gas exports. During this period, the society has undergone a significant shift in its buying and consumption habits. Growing disposable income has fueled an interest in designer brands and traveling abroad for vacations.
Dr. Moza Al Malki lamented that Qatari youth is seeking personal loans to travel abroad. She opines that, “personal loans should be given only for emergencies like treatment or to solve a financial crisis. Giving loans just for enjoyment is not justified. Every grown up person has the right to apply for a loan. The only solution to address this problem is to raise awareness through the media and encourage people to spend their vacation in Qatar.” — Dr. Moza Al Malki, well-known Qatari psychologist
The Qatar National Development Strategy 2011-2016 plans to set limits on personal loans based on an individual’s income. Statistics from the report point out to a deepening debt crisis in the country, with about three quarters of Qatari families in debt for more than QR 250,000. By 2016, the government aims to halve the number of Qatari families in debt.
However, a concern has been raised that if the government uses its vast wealth to repay loans on behalf of the indebted, the practice of taking unnecessary loans will be encouraged.