Credit card use on the rise in Bahrain
Close to 18 percent of Bahrain's population uses credit cards with most consumers using credit as a borrowing tool, rather than as a mode of payment, reported a Bahrain Monetary Agency (BMA) survey.
"Consumers in Bahrain are showing an increased preference for cash free transactions involving the use of a variety of plastic cards, including credit cards and debit cards," said Director of Economic Research at the BMA, Abdul Rahman Saif.
The survey revealed that the number of people owning credit cards rose by five percent to reach 116,538 at the end of 2002, compared with 111,127 at 2001-end, while the number of credit card accounts rose by 0.6 percent to 82,418 in 2002, from 81,900 in 2001.
The amount of outstanding credit card debt rose by 10 percent to 53.9 million Bahraini dinars ($145 million) at the end of last year, from BD 49 million ($132 million) at 2001-end.
The credit card debt represented 7.9 percent of total personal loans extended by Bahrain's 23 commercial banks and 1.7 percent of total deposits held by these banks. The average balance on each credit card account was BD 650 ($1,755).
The value of rollover amounts, where the account-holder partially pays the debt incurred, increased by 14.3 percent to BD 46.4 million at 2002-end, from BD 40.6 million at the end of 2001. Rollover amounts accounted for 86 percent of total credit card debt last year.
Delinquincy amounts, which arise when account holders fail to make any payment for 90 days, comprised 10.8 percent of total credit card debt. Such debt rose only marginally to BD 5.8 million last year, from five million dinars in 2001.
"The increase in credit card usage is inevitable as cashless transactions have become the norm in all parts of the world," said Saif. "As long as the usage of credit cards remains responsible, its growth is a welcome development as part of the overall growth and diversity of the financial services industry." — (menareport.com)
© 2003 Mena Report (www.menareport.com)