UAE: More residents opting for personal loans; here's why

Waheed Abbas/Dubai
Filed on April 27, 2021
Photo: Wam

Local economic recovery, job stability and low interest rates are fuelling demand for credit

Demand and appetite for both personal and business loans witnessed remarkable recovery in the first quarter of 2021, according to the UAE Central Bank’s Q1 2021 Credit Sentiment Survey.

In terms of expectations, survey respondents expressed a positive outlook, foreseeing a rise in demand for loans from both consumers and businesses.

Strong demand for personal loans in the first quarter of 2021 reflects improved consumer confidence, thanks to a lower number of new Covid-19 cases, steady recovery in the economy, stability in the jobs market and low interest rates.

The UAE Central Bank’s Q1 2021 Credit Sentiment Survey results revealed that the increase in overall demand for credit was evident for housing, personal loans and credit card loans across all Emirates — most significantly in Dubai.

Survey respondents indicated that the rise in demand was primarily due to financial and property markets outlook, increase in income and low interest rates.

“In terms of expectations for the June quarter, appetite and demand for personal loans is expected to increase further, and credit standards, in aggregate, are expected to ease moderately,” the Central Bank said in its quarterly report.

Central Bank data revealed a moderate increase in business loans in the first quarter. By Emirate, survey results revealed a marked increase in credit appetite and demand for business loans across all Emirates, predominately in the Northern Emirates and Dubai.

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