An unofficial survey recently published in Kuwait estimated that 83 per cent of Kuwaitis are indebted, and that most of their debts are concentrated on purchasing housing, cars, furniture, and other consumer items. The last two years has witnessed a record growth in the number of credit cards issued and the value of spending. Statistics from Visa International show that over one million Visa cards were issued in Saudi Arabia last year, a rise of 41 per cent against 1997. Spending through MasterCard in the Middle East rose 22 per cent in 1998.Central bank statistics show the extent of personal loans in the region. Personal loans in Oman constituted 25.8 per cent of total bank credit as compared with 13.7 per cent for import finance.
Consumer loans rank second in overall bank credit, following business and industry finance.
Bankers say that although a large proportion of the UAE's personal loans portfolio last year was used to finance stockmarket trade, an important proportion was used for consumer items, in line with the trend prevailing since the end of the Gulf War. In Kuwait, the ratio of personal loans to overall credit is much less than that of the UAE or Oman. This results from a Central Bank of Kuwait ceiling of KD10,000 on each loan. The authorities also compel banks not to exceed a percentage of 10 per cent of total private sector deposits for personal loans. Consumer lending in Kuwait has, nevertheless, reached record levels.