Banks to see loan surge in Ramadan
01 Jun 2017 - 0:49
By Sachin Kumar / The Peninsula
Consumer loans will get a big boost during the holy month of Ramadan. Car loans will ride on the wave of offers announced by dealers, while personal loans and credit card issuance will jump on the increased consumer spending during the month.
“The demand for personal loans increases sharply during Ramadan and Eid mainly driven by two factors. First is expatriates go to their home country during the holy month and take personal loans to fulfill their financial commitments such as buying a plot of land, a house or any other asset,” a senior official of a private bank told The Peninsula. “Secondly, people tend to spend more during Ramadan and Eid as they host guests for iftar, decorate home, change furniture and give gifts to their family members and friends. To meet these additional expenses, consumers apply for personal loans,” he added.
Most of the car dealers have already announced tempting offers on loans to lure customers. Dealers are offering free insurance and registration, free service (for limited time), zero or low down payment option and other freebies.
“When it comes to car sales, Ramadan outstrips all other months because many customers wait for offers which are announced during the month. Car sales usually increase by 20 to 30 percent during Ramadan and Eid,” said a senior official of car dealer. In a bid to push up auto loans, banks are going extra mile. They have tied up with car dealers and are offering waiver of processing fees and giving free insurance cover to customers.
“Qatar’s retail banking sector is different from other countries. For example, a bank can offer car loan to a person who has salary account with it and this narrows its target group. In order to cover a large set of customers banks tie up with multiple car dealers to get a large pool of customers,” said the bank official.
Banks are attracting customer to take credit cards by announcing offers such as cash back and discounts on air tickets if a customer books ticket with a credit card.
Banks are encouraging customers to take personal loans by announcing attractive offers. “ibq is running an offer under which if a customer applies for a personal loan during Ramadan, he could be one of the lucky persons to win QR10,000,” a senior official of ibq told The Peninsula.