Debt-to-Income Per Capita at 70%, as CBJ Warns of Rise in Retail Credit Facilities

تم نشره في Mon 2 October / Oct 2017. 12:00 AM
  • Central Bank of Jordan (CBJ) Building, Amman - (Archives)

AMMAN —AlGhad— Finally, the Central Bank of Jordan (CBJ) announced that the overall rate of Debt-to-Income per capita has reached 70 per cent last year, in 2016, according to the CBJ’s 2016 Financial Stability Report.

Credit facilitated in total by banks in Jordan has increased by 8.5 per cent in 2016 alone, approx. JOD1.8 billion, from 2015’s JOD21.103 billion to JOD22.905 billion.

By the end of 2016, total credit facilitated to the retail (individual) sector stood at around JOD9.58 billion, down some JOD240 million from 2015’s JOD9.74 billion.

Meanwhile, the Central Bank says that the decline was not caused by a real drop in credit facilitated to individuals.

Instead, a number of banks have re-calibrated their credit facilities and categories, which made it seem as though the totals per individual retail sector has dropped, CBJ says.

Whereas the average wage range in Jordan has seen very limited to no change over the recent years, the living costs and prices have been rising.

As a result, the purchasing power of the Jordanian Dinar has declined, in the midst of calls and warnings by economists and experts to heed the rise in citizen indebtedness.

Financial Expert Mufleh Aqel told AlGhad that the rise in debt is caused by the individuals’ increasing dependency on credit facilities to cover expenses, due to the erosion of purchasing power.

In the meantime, economist Zyan Zawaneh underscored that this radical explosion in debt is dangerous, and reflects negatively on society and economy.