AMMAN — The Financial Stability Report recently issued by the Central Bank of Jordan found that borrowers from local banks in the Kingdom use 45 percent of their monthly income to repay loans, Al-Ghad News reported.
اضافة اعلان
The percentage of individuals’ debt paid monthly to local banks increased from 43 percent in 2019.
The Central Bank said that the percentage was the result of a decrease in individual’s incomes in 2020, due to repercussions from the COVID pandemic.
Although the percentage increased in 2020, it is still acceptable according to international standards; where the average percentage in most countries ranges between 40 percent and 50 percent.
The ratio is less than 50 percent for 17 local banks, while the percentage was higher at three banks.
The report showed that the total debt held by individuals, in addition to non-banking financial institutions, increased from JD11.2 billion at the end of 2019 to nearly JD12 billion at the end of 2020; which was higher than the 4 percent growth rate recorded in 2019.
However, a large part of the growth during 2020 represents banks postponing debt repayments for workers affected by the pandemic.
The number of bank borrowers reached 1.17 million at the end of 2020, compared to 1.16 million at the end of 2019; which is a growth rate of 0.9 percent.
Regarding the distribution of borrowers by gender; at the end of 2020, the number of male borrowers reached 953,900, constituting 81.3 percent of the total number of individual borrowers, while the number of female borrowers reached about 219,800, constituting 18.7 percent of the total number of borrowers.
The rise in the percentage has negative effects on financial and economic stability, as it might lead to a decline in the ability of individuals to pay, which increases the default rates of banks and other financial institutions, in addition to weakening the ability of individuals to spend and consume, which will negatively affects economic growth.
Read more National news
.jpg)
.jpg)
