Consumer debts in Saudi Arabia dipped by one per cent or SAR2.4 billion at the end of the third quarter of the current year to an outstanding balance of SAR325.1bn against SAR327.5bn at the end of the second quarter.
This is the first time consumer debts have edged down since 2009, according to data and analysis by Al-Eqtisadiah.
The outstanding balance of consumer debts’ standing balance comprises 24.4 per cent of the total value of loans and credit facilities portfolio of local banks, which amounted to SAR1.33 trillion at the end of Q3.
It’s noteworthy that consumer debt is the outstanding debt of consumers, as opposed to that of businesses or governments, and is usually to finance purchases rather than investments.
Since 1998 to date, consumer debt in Saudi Arabia has grown almost seven-fold from SAR47.1bn to SAR325.1billion, the report indicates.
Consumer debt or loans are mostly used to restore and refurbish homes, purchase vehicles and furniture, finance education, healthcare tourism and travel expenses.
According to the figures, Saudis borrowed SAR27.6 to buy vehicles, and SAR35.6bn to renovate and refurnish homes.
(SAR1 = AED0.98, at the time of publishing)