Enab Baladi – Marina Merhej

Eid Ziyoud lost his job at the Ministry of Administrative Development at the beginning of 2025 due to a decision to dismiss him along with a group of his colleagues under what is termed “the restructuring of the state apparatus.”

Since taking power in Syria, Mohammed al-Bashir’s government has let go of some employees in the public sector, especially those appointed from the “families of the deceased” of the previous regime’s army, or those who were selected through the competition for “released” personnel from mandatory military service. Additionally, a number of other employees have had their contracts frozen, granting them a paid leave for three months.

Delinquent loan installments

Ziyoud obtained a personal loan from the Commercial Bank worth 12.5 million Syrian pounds (with the dollar averaging around 10,000 pounds in the black market) with a monthly installment of 255,500 that he pays manually at one of the bank branches over seven years.

However, he will not be able to pay the loan installments due to him if the living conditions remain this poor, according to his statement to Enab Baladi. Concurrently with the increase in the number of unemployed individuals and a lack of job offers in the market, he is unsure what measures the bank will take to recover the loan amount.

The average salary and wages in the public sector range between 375,000 and 400,000 pounds following the recent increase in 2024, which was by 50%. Public employees are able to obtain personal loans from state banks that are commensurate with their incomes, provided they are capable of repaying them.

Amani al-Farwan was granted a paid leave for three months, and there is no clarity about what lies ahead at the end of this period.

Al-Farwan obtained a personal loan from the Real Estate Bank worth 15 million Syrian pounds for seven years, with a monthly installment of 300,000 pounds that is automatically deducted when her salary is issued. She will continue to pay its installments from her additional work in the private sector if any decision is made to dismiss her from her position so that she does not harm her guarantor, according to her statement to Enab Baladi.

The Minister of Finance in the transitional Syrian government, Mohammad Abazid, announced an increase in the salaries of many public sector employees that could reach 400% after the completion of the “state apparatus restructuring” process, without revealing the categories that will benefit from it, which will cost the state about 1 trillion and 650 million pounds monthly.

Modest loss

The estimate of the loan bulk and its impact is the responsibility of the Central Bank of Syria (CBS), which oversees the lending activities of banks in general. The percentage of personal loans is quite modest in relation to the total lending provided by state banks; however, these funds belong to depositors and not the bank, and depositors have rights to their funds, according to economic expert and researcher Dr. Ali Mohammed, who spoke to Enab Baladi.

The ceiling for personal loans granted by state banks varied until the end of 2024, with the maximum ceiling at the Commercial Bank reaching 50 million pounds, while the Real Estate Bank offers up to 25 million pounds. Both the Popular Credit and Savings Banks have set loans with a ceiling of 5 million pounds.

Dr. Ali Mohammed believes that the dismissed employee is now without income and will be unable to repay, which requires intervention from the concerned ministries. When the decision to dismiss was made, this issue should have been taken into account. He questioned the possibility of exempting these loans from fees and interest until the loan term ends, so that the borrower would only need to repay the remaining principal amount of what they borrowed, or fully exempt them from all amounts borrowed. This requires in-depth studies from the relevant authorities that undertook the restructuring of the government apparatus.

Loans guaranteed by insurance

The Syrian General Insurance Institution has signed agreements with some public and private banks. Under these agreements, the institution provides life and total permanent disability insurance services in exchange for guaranteeing the repayment of unpaid loans by bank clients (borrowers) in case of default.

The General Insurance Institution clarified to Enab Baladi that it will cover the debt amount guaranteed by it, considering itself a guarantor for the borrower, with the note that the institution reserves the right to take necessary legal actions to secure its rights fully from the defaulting borrower, especially after these banks have taken all necessary procedures related to collections according to their banking policies.

The institution clarified in its response that currently, it does not have accurate statistics on the number of employees who have taken loans guaranteed by the Insurance Institution and are currently working on collecting these statistics in coordination with the banks.

Legal procedures

This is not the first time that government banks in Syria have faced the issue of borrowers being unable to pay loan installments. Many employees who took loans before 2011 found themselves having to flee outside Syria or were arrested by security forces or went missing due to what Syria has endured over the past years.

Today’s situation is different, as employees are dismissed by a decision from the government. However, the procedures followed by the banks in both cases remain the same. The bank seizes the guarantor’s salary and deducts the installment if the borrower fails to meet their obligations. If that also fails, the bank moves to legal proceedings, starting with notifications and ending with seizing the borrower’s assets if they fail to meet their obligations, according to lawyer Odai Shawwa, who spoke to Enab Baladi.

Lawyer Shawwa added that the dismissed employee has the right to file a lawsuit with the administrative court against the entity that dismissed them. The dismissal decision might either be for valid reasons or an arbitrary decision, allowing the employee to return to their job and receive all entitlements for the period they were suspended.

Circulars and decisions

The Central Bank of Syria issued decision No. 1699 on December 30, 2024, which postponed all due loan installments starting from December 1, 2024, for one time only for three months from that date, if the client wishes to postpone the due installments.

The Central Bank clarified in a circular to financial institutions that Enab Baladi obtained a copy of, that the postponement does not require the client to repay the installments in one payment once the period ends.

Contractual interest is the bank’s right, and it is an option available to clients: either pay the due installments on time or bear the cost of these additional interests for the postponement period, with the measures needed regarding the implication of the contractual interest to be taken by customers to ensure that it is not added to the loan amount and calculated as compound contractual interest on it.

Banks must clearly and explicitly announce through all available means, especially to clients with limited incomes, that the postponement will occur automatically and that the borrower will incur additional contractual Interest, as stated in the statement.

Public banks in Syria halted personal loans during the last quarter of 2024, citing reasons related to a shortage of lending liquidity and a disparity between income levels (which had declined due to the collapse of the pound) and the value of the installments due on loans.