Dubai-CEO of National Bonds in UAE Mohammed al-Ali believes that savings are one of the most important development tools and a method to maintain national economic balance.
Ali told Asharq Al-Awsat newspaper during an interview that his company seeks for bonds to become one of the funding tools of development during the upcoming economic stage.
When asked about targeted goals of National Bonds, Ali said that the strategy of the company is to compliment that of the state for the best interest of civilians and residents.
He said that National Bonds aims to achieve financial stability and security for all citizens and to support the local economy.
He added that the company seeks to become of the main tools for development during the coming stage known as the post-oil stage. The new economy conditions the participation of the public in a way that uses consumption to activate the market without overburdening the citizens.
Lastly, the firm aims to develop the trust between us and the public through programs and products that meet their needs.
Ali believes that the fluctuations and hesitations in the world economy could negatively affect one sector more than another. For instance, retail business is of the most sectors affected by this, but that shouldn’t influence the savings of individuals as well as the whole nation.
But he explained that this could be fought through directed investments and the use of the suitable tools. Such a move will benefit the economy and increase incomes.
In response to the challenges the company currently faces, CEO Ali explained that the biggest challenge was the excessive consumption and the absence of financial and economic awareness. He added that saving is new to the Gulf but National Bonds was able to reach to a large number of clients.
He went on to say that the consumption culture led many to debts. But National Bonds received a positive reaction when it first launched its products and explained its culture.
Ali said that their challenge now lies in keeping up to date with the economic developments and meeting the needs of the public. Thus, they respond to the developments and enhance trust between the company and the public.
The CEO said that over the past ten years, National Bonds attracted around 816,000 investors and savers of 200 different nationalities with investments close to six billion AED ($1.6 billion). He believes this reflects the success of the strategy which led to an almost 1.2 billion AED ($326 million) in revenues since 2006. He added that the company worked on developing its methods and programs to cover a wider range of clients and all based on the Islamic Law.
Ali said that the company considers saving as a development tool and a method to maintain the national economic balanced.
Based on statistics, between the years 1985 and 2010, China, Hong Kong, Japan, South Korea and many other countries were able to have fewer debts due to the increased number of savings.
Ali believed that there is a need to correct some of the wrong beliefs regarding wealth, savings, and debts.
He also explained that since its establishment, the company has been working on educating the public on the importance of savings until it becomes a habit.
According to Ali, there had been some fears especially that many were afraid that the concept of savings was against Islamic Law. But he explained that bonds are an Islamic product and aim at leading to development and advancement.
He added that National Bonds is a company with several projects and investments that fall in line with the Islamic Law, explaining that it is up to the saver himself to choose the suitable tools and methods for his savings capital.
When asked about the difference between the 2015 Savings Index and that of 2014, CEO Ali said that the rate of Saudi savers increased from 27% to 33% in 2015. The data is a sign of rising awareness on the importance of saving.
The CEO stressed that the firm relies on the awareness of importance of savings and not the changed circumstances. He added that his personal belief is that Saudi public is inclining more towards saving because of the financial situations that require partnership between everyone.
Ali believes that people’s circumstances are all the same, whether problems with rent or bills or anything else. The only difference lies in the will to manage incomes and budgets. He added that the number one enemy of savings is the false lifestyle that is built on consumption and debts.
He explained that no matter the income or salary, there should be a savings’ margin. He stated that wealthy people save less than those with limited income.
National Bonds CEO concluded that it is a matter of lifestyle, prioritizing, and budget management.