RIYADH — About 570,000 Saudis who have taken loans from the Real Estate Development Fund (REDF) have not updated their information, the organization said, adding that it was facing difficulty to collect installments from those clients.
"Without correct data the fund will not be able to recover its money from clients who have taken loans," a senior official at the fund told Al-Watan Arabic daily.
The fund intends to collect SR6 billion from defaulters during the current year, the official added.
Addressing a Shoura Council meeting, REDF officials said the organization was able to recover loan amounts from 85,000 citizens. "The rate of recovery reached 50 percent in the first quarter of 2017, compared to the same period in 2016.”
The Shoura was discussing the fund's annual report for 1437/38H (2016).
The official said the fund's basic law was designed to support people having limited and middle income. "Loans should not be given to people outside these two categories," he added.
About 85 percent of loan applicants receive a monthly salary of SR14,000.
"We have a large data bank of customers. Unfortunately the majority of them have not updated their information," said the official.
"Many customers cannot understand the various products offered by the fund and they don't follow the media," he added.
A Shoura member asked the prospects of getting REDF loans by citizens who do not have any jobs or fixed income, the officials representing the fund said their cases should be settled outside the fund.
"We can give loans only to applicants who have the capacity to repay the money from their revenue or salary," one official said in reply to the question.
Recently, a workshop was held to discuss the housing program, which is one of the programs in Vision 2030.
The program includes 16 governmental entities working together as one team in partnership with the private sector in order to raise the percentage of home ownership to 60 percent by 2020 and to 70 percent by 2030.
The programs and goals of the Real Estate Development Fund were also showcased, as well as the segments of beneficiaries of these programs, the funding opportunities per segment, and the products to be provided in partnership with the financiers, such as: financing residential units under construction; self-financing; offering finance products that meet the needs of retirees, such as an extension of the funding period up to the age of 70; providing financing solutions to private sector employees and entrepreneurs through mortgage facilities; and other products that meet the needs of all segments.
All products will be supported through a subsidized real estate loan.
The CEO of the Saudi Real Estate Refinance Company, which is owned by the Public Investment Fund, explained the nature of the company and its goals, which include achieving growth and stability in the real estate financing sector and refinancing 10 and 20 percent of the total existing real estate loans by 2020 and 2026, respectively.
The company's role also includes providing necessary liquidity to achieve the targeted growth, so that real estate financing — currently at SR290 billion — can reach SR502 billion by 2020, in addition to offering financing at a fixed cost that can lead to stable real estate financing.