Assessment of banks performance from the client’s perspective

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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

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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.

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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
7.2. Statement of the problem............................................................................................12
7.3. Towards good Practice................................................................................................12
8. Type of properties financed at present and in the near future............................................13
8.1. Survey findings...........................................................................................................13
8.2. Statement of the problem............................................................................................13
8.3. Towards good Practice................................................................................................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

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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

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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.

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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

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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.

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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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2397, Dammam, KSA
4. The length of period of the loan mortgage’s repayment
4.1. Survey findings
4.2. Statement of the problem
4.3. Towards good Practice

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2397, Dammam, KSA
5. Start date of the financing scheme
5.1. Survey findings
5.2. Statement of the problem
5.3. Towards good Practice

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2397, Dammam, KSA
6. Number of mortgage loans granted last year and since the start of the financing
scheme
6.1. Survey findings
6.2. Statement of the problem
 The scheme.
6.3. Towards good Practice
 Some

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7. Total value of mortgages granted
7.1. Survey findings
7.2. Statement of the problem
 Low
7.3. Towards good Practice
 The good

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8. Type of properties financed at present and in the near future
8.1. Survey findings
8.2. Statement of the problem
8.3. Towards good Practice
 To

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9. The banks’ awareness of financing activities of other financial organizations
9.1. Survey findings
9.2. Statement of the problem
9.3. Towards good Practice

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2397, Dammam, KSA
10. The rights of the property’s owner during the repayment of the mortgage period
10.1. Survey findings
10.2. Statement of the problem
10.3. Towards good Practice
 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

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11. Type of financial support granted by banks to help the owner
11.1. Survey findings
11.2. Statement of the problem
11.3. Towards good Practice

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12. Possible plans of the bank to increase the amount of mortgage loans and attract
potential clients
12.1. Survey findings
12.2. Statement of the problem
 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
12.3. Towards good Practice

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13. The weight of the user& property-driven factors on the property’s value
13.1. Survey findings
13.2. Statement of the problem
13.3. Towards good Practice

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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