AMMAN — Increasingly more Jordanians owe money to
banks, recent Central Bank of Jordan (CBJ) data showed, with total loans owed
to banks by individuals reaching JD11.8 billion ($16.64 billion) at the end of
last year, compared to JD10.9 billion at the end of 2020.
Financial analysts attributed this 8.6 percent increase to
the decline in living standards and the inability of many to provide basic
needs. The COVID-19 pandemic was also cited as a reason for the rise in
debt.
According to Jo24, CBJ data showed that there were 1.22
million borrowers in 2021, compared to 1.17 million borrowers in the previous
year, an increase of 4.3 percent.
Individual indebtedness has seen a successive increase since
2017 when it reached JD9.45 billion. However, the CBJ stated that the rise in
indebtedness during the past two years does not represent an actual increase in
debt; rather, it is a result of banks postponing the payment of debts of
customers affected by the pandemic.
Regarding the distribution of borrowers by gender, the
number of male borrowers stands at about borrowers, while the number of female
borrowers stands at about 224,000.
Only resort
Despite high-interest rates in Jordan, banks remain the only
resort available to citizens who apply for loans to meet basic needs,
especially in light of the high poverty rate, eroding incomes, and low
salaries, offset by a rise in prices and the cost of living in general.
The CBJ’s report on rising indebtedness by individuals in
2021 coincides with renewed calls to extend the decision to prevent the
imprisonment of debtors, which is supposed to expire at the end of December.
The government made amendments to the Judicial Execution
Law, according to which cases of non-imprisonment were expanded, especially for
debtors whose debts are less than JD5,000.
The number of those wanted by the judiciary for failing to
pay debts exceeded 153,000 until this December, according to official data.
This number is not inclusive as many of those who have debts of less than
JD5,000 were not counted.
More than just banksاضافة اعلان
The total indebtedness of individuals is much higher than
simply of those who owe money to banks, financial experts contend, as many owe
debts to shops and various facilities, in addition to personal loans owed to
institutions other than banks.
As for the distribution of individuals according to fixed or
variable interest rates, the number of individuals borrowing from banks based
on fixed interest rates reached 763,000, constituting 61.7 percent of the total
number of borrowers. Meanwhile, the number of individuals borrowing from banks
based on variable interest rates reached 473,000 borrowers constituting 38.3
percent of the total.
According to the CBJ, the monthly burden of indebtedness for
individuals in 2021 amounted to 45.1 percent due to the decrease in individual
income caused by the pandemic.
The largest share of debt belongs to housing loans, which
constituted about 39.9 percent of individual loans at the end of last year,
compared to 41.1 percent at the end of 2020, followed by personal loans, which
constituted 35.1 percent of total loans, and consumer loans, including the
purchase of cars, at 13.1 percent.
According to data issued by the Department of Statistics,
the average monthly wage for Jordanians is JD543 ($765.6) for workers in the
public and private sectors.
In a recent report, the World Bank estimated that the
percentage of those living below the extreme poverty line in Jordan would reach
27 percent in 2021, as they live on less than JD1.3 per day.
According to the classification of the World Bank, Jordan is
one of eight developing economies in the region that show the highest rates of
poverty among the population, mainly as a result of the negative effects of the
pandemic.
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