"As each borrower is different, it is important to review applications on a case-by-case basis"
Qatar's banks are witnessing loan growth due to a rapidly expanding economy, but local lenders have been reviewing applications discreetly to meet their asset and credit quality in line with industry regulations. Many new expatriates have faced difficulty obtaining personal or vehicle loan as local banks insist on a minimum disposable amount in their salary for monthly repayments. "Often this is 50% of an expatriate's salary," a senior banker who sought anonymity told Gulf Times yesterday.
Inquiries reveal expatriates employed in the private sector faced greater difficulties in availing of personal or vehicle loan than those employed by the government. This is because government establishments are invariably in the "prime list" of local banks. On the other hand, only select companies in the private sector figure in the "favoured" category. "Expatriates working in many private firms are often asked to furnish their company details including Commercial Registration and financial statement prior to sanctioning them loan," a banker said. While each bank insists on minimum salary requirement prior to sanctioning personal or vehicle loan, it varies among lenders.
Furthermore, sanctioning loan is subject to a number of factors, including the prospective borrower's ability to repay and his/her salary. When contacted a leading bank said: "As each borrower is different, it is important to review applications on a case-by-case basis. We need to do this to ensure we grant credit responsibly and in a way that does not cause borrowers difficulties when repaying their loans." The bank, however, insisted it did not discriminate between government and private employees in relation to credit disbursement. In terms of personal loan, QCB has already set a "lending limit cap", which is QR400,000 in the case of expatriates and QR2mn for Qataris.
There is also a cap on interest rates that can be levied on borrowers. Doha Bank Group CEO Dr R Seetharaman said the regulations in place were good for both lenders and borrowers. "The idea is simple and straightforward - we don't want debt trap for our customers; their interests need to be safeguarded as we meet their financial needs," he told Gulf Times. Meanwhile, a recent report by QNB has showed local banks are expected to see lending growth of around 20% until 2014 as their contribution to the rapidly-expanding national economy grows. Qatar's GDP will grow 6.5% this year and at a higher pace - 6.8% in 2014 with large-scale public infrastructure projects becoming a key growth driver, QNB said.
© Gulf Times 2013
