Banks compete with loans.. The citizen loses

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[size=52]Banks compete with loans.. The citizen loses[/size]

[size=45]Social media and the media are abuzz with government and private banks granting types of bank loans, as these banks require the fulfillment of many requirements in order to grant loans and advances, demanding that employees set a set of conditions to obtain these loans in addition to the imaginary amounts that the bank follows to earn interest through them.[/size]
[size=45]Banking culture[/size]
[size=45]The Iraqi citizen falls into the trap of bank loans because he was not accustomed to them previously. The majority of Iraqis view banks as places to secure their money, even though a large segment of them prefer home savings.[/size]
[size=45]Many borrowers who applied for a loan and advance confirmed that they did not receive a form explaining the method of repaying the loan in order for there to be clarity about the repayment process or the loan interest and what they have and what they owe.[/size]
[size=45]In addition, instead of facilitating these loans, the banks imposed impossible conditions for granting them, such as bringing a guarantor or signing a promissory note (acknowledging receipt of the amount and returning it upon request) or guarantee documents, in addition to annual interest that reached four percent.[/size]
[size=45]Win-win[/size]
[size=45]Dr. Economist Basem Khamis explains, “A government bank, in addition to the Central Bank of Iraq, sets the interest rate at 4%, with a profit margin, and the interest difference between deposits and lending is 3%. Why is the interest more than 50%?” Reduce the period for paying the monthly installment and the value of the installment will gradually rise, and reduce the interest, which is the most appropriate way for the bank and the borrower to profit.”[/size]
[size=45]It seems that banks' lending to citizens according to these ratios was a profitable process, as these financial institutions did not stop at providing their services to employees who were considered a safe party to pay, but rather later expanded to lending to non-employee citizens with the guarantee of a sponsor or the project itself.[/size]
[size=45]Despite the fact that the Finance Committee in the Iraqi Parliament hosted the directors of the Rafidain and Al-Rashid government banks regarding the advances and financial loans that the two banks issue to citizens, after describing the amount of interest on those loans as large, the banks continued without hesitation to activate their loans with large amounts of interest.[/size]
[size=45]Plan but![/size]
[size=45]Employees in various institutions have confirmed that government banks impose very large interests on advances and loans for employees, as “these interests continue to increase annually, which means that the 5% interest, for example, is not fixed.”[/size]
[size=45]Employees say, “Banks all over the world do not impose such benefits, in addition to the impossible conditions that the employee is forced to meet.”[/size]
[size=45]According to what they said, most of them started paying off small loans in one payment to get rid of the interest that is beyond imagination, as they described it, calling on the Ministry of Finance and the concerned authorities to “develop a new mechanism for the interest imposed on loans for employees, citizens, and even retirees.”[/size]
[size=45]Economist Mustafa Hantoush explained to (Al Mada), “Because of the old visions of those in charge of the banking sector and the Central Bank of Iraq, they refuse to conduct lending plans, which take into account financial liquidity and the initiatives presented by the Central Bank and government and private banks, and this plan is approved by the Council of Ministers.” It is directed towards specific sectors in industry, agriculture and housing, so that the investor knows that these sectors will be financed by loans.”[/size]
[size=45]He pointed out, “We have one budget plan that is supposed to have three plans, which are investment, loans, and budgeting.” Pointing out that “loans in Iraq operate without plans and according to the mood of the government and the central bank, and there is nothing planned.”[/size]
[size=45]He pointed out that “industrial loans are currently suspended for a personal view,” noting that “loan and bank transactions take an interest rate of more than 4%, but the problem is the lack of distinction between profitable investment loans and development loans, because the issue of housing in Iraq is not profitable and these are developmental matters.”[/size]
[size=45]Secrets and tricks[/size]
[size=45]A few months ago, Rafidain Bank, a government bank, began announcing that it would begin granting loans to buy or renovate homes, starting from 50 million dinars up to 150 million dinars, with an interest rate between 4-5 percent, depending on the value of the loan, without providing any details or clarification. Regarding the mechanism for calculating interest, rather, he focused his statements on the guarantees, which are a civil servant and a mortgage on a property that is required to be renovated or purchased, and with a repayment period of 10 years for all types of loans, and this is the biggest calamity.[/size]
[size=45]The financial advisor to the Prime Minister, Mazhar Muhammad Salih, confirmed in a previous press statement followed by Al-Mada that loan interest threatens the Iraqi economy, calling on the boards of directors of Iraqi banks to work to reduce it, while stating that the reasons for the high interest rate are due to the liberalization that the banks have witnessed. Iraq, where freedom was given to the management of the Council of Banks to determine the interest on loans and deposits in the central bank, and the interest of the central bank is very large, and it needs to be reconsidered, especially since the maximum interest rate in the banks of the countries of the world is 6 percent.[/size]
[size=45]It is noteworthy that the Iraqi Ministry of Planning estimated that the poverty rate in the country has risen to 25%, which requires an increase in government and private bank loans for people with limited income and the unemployed, but the conditions imposed by these banks are an obstacle to them.[/size]
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