assessment of banks performance from the client’s perspective executive report

@ All rights reserved of the author and the College of Architecture and Planning, University of Dammam, 31451 Al-Dammam, P O Box

2397, Dammam, KSA

Assessment of banks performance from the client’s

perspective: The case of Eastern Province, the Kingdom

of Saudi Arabia

Brief Research report

Dr. Bhzad Sidawi (Bsc., Mphil, PhD.)

Associate Professor

College of Architecture and Planning

University of Dammam


2397, Dammam, KSA

Acknowledgements

The researcher would like to thank all citizens who took part in the questionnaire survey,

interviews and discussion forum. He would like to express his graduate to the University of

Dammam for sponsoring the research. Special thanks should also go to Aswaq Al Mazrah

(Farm Store chain) which supported the interviews’ and discussion forum’s venue. Finally, the

researcher would like to thank the dean and staff of College of Architecture and planning for

their support.


2397, Dammam, KSA

Table of Contents

Assessment of banks performance from the client’s perspective: The case of Eastern Province,

the Kingdom of Saudi Arabia ...................................................................................................... 1

1. Forward ................................................................................................................................ 5 2. Research Objectives and Methodology ................................................................................ 6 3. The economic status of the respondents ............................................................................... 8

3.1. Survey findings ............................................................................................................. 8

3.2. Statement of the problem .............................................................................................. 8 3.3. Towards good Practice .................................................................................................. 8

4. The length of period of the loan mortgage’s repayment ...................................................... 9

4.1. Survey findings ............................................................................................................. 9 4.2. Statement of the problem .............................................................................................. 9

4.3. Towards good Practice .................................................................................................. 9 5. Start date of the financing scheme ..................................................................................... 10

5.1. Survey findings ........................................................................................................... 10 5.2. Statement of the problem ............................................................................................ 10 5.3. Towards good Practice ................................................................................................ 10

6. Number of mortgage loans granted last year and since the start of the financing scheme 11 6.1. Survey findings ........................................................................................................... 11

6.2. Statement of the problem ............................................................................................ 11 6.3. Towards good Practice ................................................................................................ 11

7. Total value of mortgages granted ....................................................................................... 12 7.1. Survey findings ........................................................................................................... 12


8. Type of properties financed at present and in the near future ............................................ 13

8.1. Survey findings ........................................................................................................... 13


9. The banks’ awareness of financing activities of other financial organizations .................. 14

9.1. Survey findings ........................................................................................................... 14 9.2. Statement of the problem ............................................................................................ 14 9.3. Towards good Practice ................................................................................................ 14

10. The rights of the property’s owner during the repayment of the mortgage period ........ 15

10.1. Survey findings ....................................................................................................... 15 10.2. Statement of the problem ........................................................................................ 15 10.3. Towards good Practice ............................................................................................ 15

11. Type of financial support granted by banks to help the owner ...................................... 16 11.1. Survey findings ....................................................................................................... 16

11.2. Statement of the problem ........................................................................................ 16 11.3. Towards good Practice ............................................................................................ 16


2397, Dammam, KSA

12. Possible plans of the bank to increase the amount of mortgage loans and attract

potential clients .......................................................................................................................... 17

12.1. Survey findings ....................................................................................................... 17 12.2. Statement of the problem ........................................................................................ 17 12.3. Towards good Practice ............................................................................................ 17

13. The weight of the user& property-driven factors on the property’s value ..................... 18 13.1. Survey findings ....................................................................................................... 18

13.2. Statement of the problem ........................................................................................ 18 13.3. Towards good Practice ............................................................................................ 18

14. Internal and External hindrances to the lifelong financing of affordable housing ......... 19 15. Recommendations .......................................................................................................... 20 16. Appendix A .................................................................................................................... 21


2397, Dammam, KSA

1. Forward

The Saudi population has various and dynamic socio-economic needs. Each citizen has the

right to have a shelter and to own a property that is of good quality and adaptable enough to

accommodate their socio-economic needs. This report argues that providing initial financial

support i.e. mortgages loans is essential as it enables the citizens to own a dwelling thus to

have social and economic stability. The on-going support to finance the property-related issues

such as repairs, maintenance and refurbishment works, is crucial as it would help citizens to

meet various rising obligations. A field survey has been undertaken in 2011 in the Eastern

Province of the Kingdom of Saudi Arabia to find out the citizens’ views about the initial and

on-going financial support of banks and Real Estate Development Fund (REDF). The survey’s

results showed that the majority of the respondents did not manage to get a mortgage and own

a property. They said that they were not happy about banks and the REDF’s financial support

as it is beyond reach most of them. The serious lack of financial support for the population’s

socio-economic needs will surely thwart a great number of population in their attempts to own

a property, and to undertake any proper changes on it. This will also impact negatively their

social and economic life, as well as the property’s quality and value. The report recommends

that the current financing system in the Kingdom of Saudi Arabia should be reformed; and

innovative financing mechanisms that are based on Saudi society’s characteristics should be

created to accommodate the citizens’ initial and on-going needs.


2397, Dammam, KSA

2. Research Objectives and Methodology

To achieve the research objectives, it is argued that a combination of quantitative and

qualitative research methods is needed. The use of mixed methods is because the findings that

relate to each method will be used to complement one another and, at the end of the study, to

enhance theoretical or substantive completeness (Ausubel 1968). The research hypotheses that

the socio-economic needs of citizens are fully fulfilled and translated smoothly into the built

environment in the KSA. The research objectives are:

To investigate the present and future socio-economic needs of the citizens and how far

these needs have been fulfilled;

To inspect the present and future plans of citizens regarding their properties;

To find out the possible constraints on translating the socio-economic needs into the

property; and

To find out the impact of the translation of the citizens’ needs on the property’s value

The questionnaire’s survey was designed to fulfil the research objectives. It consists of a

number of sections and these are:

Section I: personal information and information about the present/future mortgage

loans that have been/would be obtained by the respondent;

Section II: The respondents’ views and level of satisfaction on the financial and

Citizens’ awareness and satisfaction with the administrative services of their banks;

and

Section III: the respondents’ willingness to undertake present and future

changes/alterations on the property, why is it being done/why will it be done? How

will it be funded? And how will it impact on the property value?

The questionnaire contain the following types of questions: multiple-choice, scale questions

(i.e. not satisfied to highly satisfied), and close-ended (see the questionnaire in appendix A).

The main survey has been undertaken in Al Khober, Al Dammam, Al Dhahran and Al Jubail

cities. It targeted mainly the low- and medium-income citizens. The researcher targeted low

and medium income areas in these cities, particularly in Dammam city. The questionnaire was

delivered to a number of houses in these areas but it became apparently clear that this

technique will not work as residents were reluctant to co-operate with the researcher. Another

technique was tried; that is to target the gatherings of citizens in the neighbourhood café shops

and mosques, and this proves to be very efficient. Around 550 citizens were met face to face at

these places, handed a long questionnaire and asked to fill in. Around 473 filled in the

questionnaire and handed back. However, 52 of the returned questionnaires were found later

on as invalid because many parts of the questionnaire were left unanswered. The final number

of valid returned questionnaires was 421; subsequently, 11 interviews were conducted and a

discussion forum was held with eight participants. The aim is to find out the hidden causes

behind the population’s dissatisfaction with the financial support of banks and the REDF, to

clarify ambiguous issues in the questionnaire’s results and to complement the questionnaire’s


2397, Dammam, KSA

results. The following statistical tools were used to analyse the questionnaire’s data: Mean

calculation, percentage, standard deviation, Skewness, and ANOVA. Cross-referencing (i.e.

similarities and non similarities) technique was used to analyse the qualitative data. This

would enable the researcher to classify the data into categories, make comparisons and allows

rational interpretation and judgement.


2397, Dammam, KSA

3. The economic status of the respondents

3.1. Survey findings

.

3.2. Statement of the problem

3.3. Towards good Practice


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4. The length of period of the loan mortgage’s repayment





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5. Start date of the financing scheme





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6. Number of mortgage loans granted last year and since the start of the financing

scheme



The scheme.


Some


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7. Total value of mortgages granted



Low


The good


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8. Type of properties financed at present and in the near future




To


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9. The banks’ awareness of financing activities of other financial organizations





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10. The rights of the property’s owner during the repayment of the mortgage period




To give more rights to the low-income owner. This would help him/her to cope with the changing

. To consider adjustments to the future policy and provide more rights to the owner


2397, Dammam, KSA

11. Type of financial support granted by banks to help the owner





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12. Possible plans of the bank to increase the amount of mortgage loans and attract

potential clients



Nearly half of banks are not happy to give the borrower more lifelong advantages and support

Some banks not happy to support the future needs of the client as such future alterations of the

property



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13. The weight of the user& property-driven factors on the property’s value





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14. Internal and External hindrances to the lifelong financing of affordable housing

Internal Hindrances

The potential External Hindrances would be:


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15. Recommendations


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16. Appendix A

assessment of banks performance from the client’s perspective executive report

Economy & Finance

planning university

survey findings

p o box

staff of college

good practice

questionnaire survey

clients perspective

case of eastern province