DUBAI: From trying to build palatial houses back home to a poorly planned start-up venture and the lure of a better lifestyle – these are among the main reasons expats end up in debt traps, according to a senior financial expert.
K. V. Shamsudheen, who has conducted more than 300 free workshops to help Indian expats in the Gulf manage their finances and get out of debt, told XPRESS, “During our interaction with Indian expats, we found that less than five per cent are confident of being able to lead a comfortable life if they were to return to their homeland. A large number of them are into a heavy debt.”
High number of suicides
“Already, 37 people have committed suicide this year. Last week itself there were reports about the murder-cum suicide of an Indian film producer and his wife and daughter. Earlier data showed that 75 per cent of the suicides by Indians were due to financial reasons. We can avoid reaching such extreme situations if we are cautious in our approach to borrowing money,” he said.
Shamsudheen recently held a workshop in which 150 Indians took an oath to regularly save a part of their income for their future, rid themselves of debt and work toward a better future. Most of these expats earned a monthly salary of less than Dh5,000.
“From my next salary I have vouched to save at least 20 per cent. When we were questioned about the lifestyle we will be able to afford if we return back home, I was forced to think and realised that even after so many years of living without my family, I have not been able to save enough.
“Today I learnt I can categorise my spending into essential, optional and basic, and I will start keeping the amount I need to save aside, before I incur my expenses,” said 40-year-old Mohammad Ali, who has been living in the Gulf for 10 years.
Only about 10 people in the gathering said they were able to set aside a regular amount for saving, whereas everyone drew a blank when asked if their families saved any money from what they remitted home out of their hard-earned income.
Indian expats in the GCC countries have a significantly high share of the total remittances from Non-resident Indians (NRIs). “Expats from this region remit much more compared to Indians living in other countries. But high remittances do not indicate high savings - less than 10 per cent of money remitted goes toward productive investment,” said Shamsudheen.
A large number of expats are not saving anything, many are in credit card debt and surveys show that in a majority of cases, the amount they remit is used by their families to meet expenses, resulting in little savings.
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