Real Estate Development Fund to access borrowers' accounts
The Real Estate Development Fund (REDF) has begun to deduct salaries from beneficiary bank accounts as a result of the large number of borrowers who defaulted on repayments of their loans, resulting in more than SR30 billion outstanding for the REDF.
REDF officials explained that in the past, when employees used to receive their salaries in cash, they had to visit any branch of the Saudi commercial bank and credit the amount in the Fund’s bank account, and that many did not repay loans, according to Arab News.
As a result of the high rate of default, the REDF will now deduct the money owed from borrowers' bank accounts.
“We tried to educate the Saudis that when they borrow the money, they have to repay it. But they don’t seem to understand,” said one REDF spokesperson.
Retirees maintain that it is unfair to have their accounts accessed to repay their loans, as most live on meager wages.
In an effort to alleviate the difficult situation, the REDF has sought the ehlp of local imams to appeal to the public during Friday prayer services.
The REDF has paid SR1.183 billion this year, financing the construction of 5,100 houses in different parts of the Kingdom.
- Total exports of Bahrain in 2004 stood at BD2.83bn, an increase of 13.4% over 2003
- Default rate for Saudi Industrial Development Fund loans minimal
- A nation of have-nots: 40% of Saudis don't have access to real estate loans
- GCC Investment Strategy and Sectors Outlook for 2006
- Abyaar Real Estate Development lists on Kuwait Stock Exchange