The Financial and Economic Affairs Committee of the House of Representatives has recommended extending the maximum repayment period for personal loans from seven to ten years, as proposed by MP Bader Al Tamimi. The proposal aims to address the financial impact of the COVID-19 pandemic, boost consumer purchasing power, assist citizens with loan repayment difficulties, enhance social stability, facilitate loan rescheduling, alleviate rising living costs, and stimulate national economic recovery.
The committee’s report notes that it sought the views of the Central Bank of Bahrain (CBB) on April 3, 2023, but had not received a response by the time the report was submitted. Despite the lack of a CBB response, the committee recommended approval based on compelling considerations of public interest. The proposal will now proceed to the full House for debate and a vote in its next session.
Extending the maximum repayment period for personal loans to ten years is seen as a measure to help individuals cope with the financial challenges brought about by the pandemic. By providing easier monthly payments and allowing for loan rescheduling, the proposal aims to alleviate the burden of rising living costs and support citizens in repaying their loans in a more manageable way.
Boosting consumer purchasing power is another key objective of the proposal. By extending the repayment period, individuals will have more disposable income to spend on goods and services, thereby supporting economic growth and recovery. Additionally, by stimulating national economic recovery, the proposal aims to create a more stable and prosperous financial environment for businesses and individuals alike.
The proposal also emphasizes the importance of safeguarding the rights of banks and financial institutions offering personal loans. While extending the repayment period, it is crucial to ensure that these institutions are protected and provided with the necessary directives from the Central Bank of Bahrain. By balancing the interests of borrowers and lenders, the proposal seeks to create a fair and equitable framework for loan repayment.
Overall, the recommendation to extend the maximum repayment period for personal loans to ten years is a step towards supporting individuals in navigating the financial challenges of the COVID-19 pandemic. By boosting consumer purchasing power, facilitating loan rescheduling, and stimulating economic recovery, the proposal aims to create a more stable and prosperous financial environment for all stakeholders involved. The proposal will now be debated and voted on in the full House of Representatives, with the potential to bring about significant positive impacts on the economy and society as a whole.
