Debtors in Oman jail as campaigning group mothballed

Muscat: A campaign to free loan defaulters from prison has been mothballed, as banks report that more Omanis and expats are falling into the debt trap.
Fak Kurbah has not been active in 2016 because companies cannot afford donations, according to Mohammed Al Zadjali, head of the campaign and also head of the legal committee at the Majlis Al Shura.
Get your essential daily briefing delivered direct to your email inbox with our e-newsletter
Fak Kurbah was launched in 2012 by the lawyers committee in Oman in coordination with the Supreme Committee for Judiciary to help those imprisoned over money troubles.
“Although it was not able to operate this year because of the economic situation, the campaign has so far managed to secure the release of 44 prisoners in its first phase in 2012 and improved in its second phase in 2014 to end the struggles of 304 prisoners.
“Next year we are planning for a better and bigger campaign and another session of Fak Kurbah. This year we couldn’t make it because of the current situation, as we can foresee that the number of companies which support the campaign will be less,” he added.
“Fak Kurbah helped almost 500 prisoners in the past two sessions. We help those who were sentenced by the court to be imprisoned for failing in paying some financial dues. We have nothing to do with criminal cases.
“Our only condition was to pay not more than OMR5,000 for one case, Al Zadjali added.
Recovery officials at Omani banks report that the Sultanate has witnessed a rise in default cases thanks to the economic downturn with many banks being forced to go to court to chase debtors.
One bank official, who declined to be named, said there has been an increase in defaults in the past 12 months, as the downward spiral of the economic slump continues.
“There has been a huge increase in the number of debtors and this has been happening from the second half of last year. Some people are just burdened with so much debt and we - as humans - feel sorry for them,” the official added .
“One 28-year-old Omani father lost his OMR400 a month job after taking a OMR20,000 loan. He is now being chased for payment and offered the bank OMR50 a month.
“Many took loans without even thinking and were unable to pay back later. The minimum amount of salary required was later raised to OMR500 by the banks, considering the scores of people applying for loans,” a bank official added.
Downturn
“There is a likelihood of an increase in the number of debtors, especially when there is a fall in the economy. In terms of GDP and government revenues and tightening of expenditure in companies, it is likely that greater default will come in the coming period. Banks should be cautious and frequently review trends in defaults of these borrowers.” said a financial expert based in Oman.
Besides the survival issues, psychologists say that non-payment of debt and the constant pressure which comes with it may result in chronic depression and stress.
“When people are unable to pay back debts, that causes them to worry and think about it, and this creates a pattern of negative thinking, where you start thinking of the consequences. This negativity causes depression, sometimes chronic, anxiety disorder and stress, and if you consider the ill effects of stress, it will not just affect you mentally but also physically.” said Roma Fernandes, psychologist at the Whispers of Serenity Clinic.