DOHA: The state-run Zakat Fund and the Department of Awqaf have called for putting curbs on consumer lending by banks and financial institutions saying that stricter lending norms are needed to check rising cases of default.
The Awqaf administration has provided the Zakat Fund QR1m to assist it in its efforts to help personal loan defaulters to meet their financial commitments so they escape legal action.
Senior Awqaf and Zakat Fund officials told reporters yesterday that there was an urgent need to create awareness, especially among younger people about the negative impact of seeking loans just to maintain a luxurious lifestyle. "The culture of rising consumerism in our midst is a matter of concern. Families are suffering as people are taking loans for unproductive use," the officials said.
"There is, therefore, the need to put stricter lending norms in place to curb the this phenomenon."
Jassem Al Kubaisi, director of the Zakat Fund, said at a news conference that the Fund has provided succour to the tune of QR6.5m to consumer loan defaulters from 2009.
There is a committee within the Zakat Fund that deals exclusively with loan default cases and such alarming is the situation that the panel receives some 20 to 30 requests from defaulters or potential defaulters for help every month.
Since 2009 the Zakat Fund has handled some 152 consumer loan default cases, said Al Kubaisi, adding that in some cases the Fund helped a defaulter repay as much as 50 percent of his outstanding loan amount.
Abdullah Al Dosari, general manager of Awqaf, was also present at the press briefing. He said that the QR1m provided to the Zakat Fund was meant exclusively for the help of loan defaulters. Al Kubaisi ruled out the possibility of the Zakat Fund setting up a separate corpus to help loan defaulters saying that would send wrong signals to people.
© The Peninsula 2011
