The rise in individual indebtedness in Jordan to 14.312 billion dinars by the end of the first quarter of 2026 deserves a reading that goes beyond the size of the recorded increase. The 0.6% growth over three months seems modest, but it comes on top of an already high credit base, equivalent to roughly a third of GDP, and accounting for nearly 40% of total banking facilities.
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The economic question relates to the nature of demand for loans, the purpose for which individuals use the financing, and the extent to which it is reflected in asset formation, income, and domestic demand. The economic impact of credit is determined not only by its volume, but by how it is used and its capacity to provide sustainable benefit to the borrower.
The composition of the portfolio shows that housing loans remained in the lead at 5.754 billion dinars, followed by personal loans at around 4.664 billion, then car loans at 1.865 billion, consumer loans at around 1.051 billion, and credit cards at 565 million dinars.
This composition means that housing loans and car loans, directly tied to asset financing, together make up about 53.2% of individual indebtedness. However, this percentage alone is not enough to say that most borrowing is directed toward investment, since housing and vehicles are both assets on a household's balance sheet, yet their effect on production and income differs from financing a project or an income-generating economic activity.
What stands out in the first-quarter data is the divergence in the trends of the portfolio's components: personal loans rose by 2.7% compared to the end of 2025, and credit card balances grew by 1.4%, while consumer loans fell by 3.6%, and car loans by nearly 2%, with housing loans remaining roughly stable.
This shift does not necessarily indicate a decline in consumer spending, because personal loans offer greater flexibility and can be used to finance ongoing needs, purchase assets, cover education costs, or settle prior obligations. Therefore, the growth in personal loans alongside the decline in loans classified as consumer loans may reflect a shift in borrowing instruments more than a fundamental change in their purposes.
Economically, individual credit supports domestic demand: housing loans stimulate the real estate market and related sectors, car loans support the vehicle trade, insurance, and maintenance, while personal loans and credit cards are reflected in sales of goods and services. The continuation of this effect depends on borrowers' ability to balance servicing installments with maintaining appropriate levels of spending and saving.
This is where the significance emerges of the monthly debt burden ratio for individual indebtedness reaching 44% of borrowers' income at the end of 2025, compared to 43.1% the previous year. Although the Central Bank places this ratio within internationally acceptable levels, it underscores the importance of monitoring the relationship between debt growth and the development of household incomes, since the sustainability of credit depends on income's ability to cover both installments and living needs at the same time.
On the other hand, portfolio quality indicators confirm that credit risks remain within manageable levels, as the non-performing loan ratio for individual loans stood at 5.4%, slightly below the overall non-performing loan ratio of 5.5%, while the default rate on housing loans did not exceed 2.5%. Additionally, 71% of individual loans carry fixed interest rates, limiting the exposure of most borrowers to interest rate fluctuations.
These indicators do not reveal a debt crisis, but rather reflect credit's influential presence in financing household needs, enabling asset ownership, and driving domestic demand, within a portfolio whose quality indicators remain stable.
The significance of the growth in individual loans remains tied to this credit's ability to balance meeting current needs with financing long-term assets and benefits, while maintaining portfolio quality and borrowers' repayment capacity.
The issue, then, is not so much about the increase or decrease in borrowing as it is about the economic value the financing achieves, and the extent to which its effect continues after the last installment is paid.
