Sat, Nov 09, 2024 | Jumada al-Awwal 7, 1446 | DXB ktweather icon0°C

UAE introduces framework for regulation of short-term credit facilities

Move takes into account shift in consumer trends

Published: Wed 27 Dec 2023, 6:34 PM

Updated: Wed 27 Dec 2023, 6:35 PM

  • By
  • WAM

Top Stories

The UAE Central Bank. — File photo

The UAE Central Bank. — File photo

Acknowledging the global shifts in consumer financial trends and the increasing demand for "Buy-Now, Pay-Later" and similar credit products and services, the Central Bank of the UAE (CBUAE) has announced the issuance of the newly amended finance companies regulation.

Under the new framework, the provision of short-term credit can be carried out by entities operating as agents of licensed banks or finance companies, following approval by CBUAE. Entities can also carry out this activity upon being licensed by CBUAE as restricted licence finance companies.

Unlicensed entities which carry on any form of short-term credit activity and intend to continue to carry on these activities, must either apply to the CBUAE to be licensed as a restricted licence finance company; or partner with a licensed finance company or a bank.

In introducing this regulation, the Central Bank wishes to ensure that finance companies and restricted licence finance companies in the UAE are operating within transparent and well-defined organizational structures and operations; prudently managed within a framework of permissible activities; and equipped with the necessary financial resources and internal risk management systems.



Next Story