Loan growth has remained strong across the GCC markets as a whole, however, banks in Qatar have witnessed the highest increase of 14.1 percent year on year, according to research from Global Investment House. As a reflection, the compareit4me group, who operate finance comparison sites around the Middle East, have noticed a rise of 79 percent in the number of consumers visiting the site to compare personal loans.
Due to Qatar banks offering low and competitive rates on personal loans, some flat rates as low as 2.12 percent, more and more residents are opting take a loan to pay for their lifestyle. The number of residents, both Qataris and expats, taking out personal loans to pay for travel and holiday related expenses, particularly, has grown at the fastest rate.
compareit4me has already noticed an increase in those visiting the site to find the right personal loan, however considering more residents are preparing to travel in December and early January for the holiday season, it’s likely the numbers of those taking personal loans are expected to increase further as residents prepare to jet off.
According to Government figures, when it comes to vacations, Qatari households spend on average QR5,711 a month (11.5 percent of their income), while expats spend around QR1,648 (9 percent) monthly on traveling abroad. That’s failing to take into consideration the additional costs that come in December with a general increase in social activity and shopping.
In addition, the general cost of living in Qatar is higher than in other MENA countries. The overall cost, for example is 5.58 percent higher than in the UAE with rent being 9.39 percent higher.
With these figures in mind and to accommodate the increasing demand for loans, from both Qatari residents and expats, many of the Qatar banks are actively competing with each other to offer low flat and reducing rates for personal loans. QIIB and QNB for example, are continuing to offer competitive rates on personal loans, and are more specifically targeting particularly expats who need help in not only setting up life in Qatar, but who are also predicted to travel back to their home country a minimum of once a year.
Al Khaliji are competing even further, offering the same flat rate for both Qatari Nationals and expats at 2.22 percent, in comparison to some other establishments who increase the flat rate for expat loans to as much as 6 percent.
According to a preliminary estimate by the Ministry of Development Planning and Statistics, at the end of last month there were approximately 2.46 million people in Qatar. That figure is up from 2.41 million from the previous month and is roughly an increase of 8.5 percent from the same month last year. The increase in population is likely to also be reflected in an increase in the amount of residents taking out loans.
Jon Richards, CEO of compareit4me group said: “This is a great time for consumers to take advantage of the low rates and consolidate any existing debts. It’s important to make sure people don’t take out unnecessary debt and don’t fund extravagant lifestyle events with debt just because it is seemingly cheap.”