Official report: Arabs pay higher interest rates on loans in Israel than Jews

Arab citizens in Israel pay higher interest rates on bank loans than Jews, Israel’s Hebrew newspaper Maariv reported on Friday citing an official report.

The report, which was conducted on banking in the Arab sector in Israel, found that there is less competition in offering services to Arabs compared to Jews.

Published by the Israeli Competition Authority for public comment on 15 May, the report found that Arab customers pay a higher interest rate on credit than Jews, even when both have similar loan and risk characteristics.

READ: Israel: Palestinian citizens reject far-right militia to combat crime in Arab districts

The report also found that the interest rate on consumer credit in Arab bank branches is on average about 10 per cent higher compared to that in Jewish branches and the interest rate on credit for small and micro businesses is on average about 7 per cent higher at the same risk level.

Israel’s Competition Authority, the newspaper reported, is working together with other partners in government with the aim of promoting additional reforms in the banking system so that it offers more services to Arabs.

Among the sought reforms, Marriv reported, are promoting the regulation of the practice of payment services and increasing accessibility of lenders outside the traditional banking sector for credit sources.

READ: Ex-police chiefs call to remove Ben Gvir as minister