Last February, 13 national banks waived the debts of 3,310 Emirati citizens from loans totalling $98.28 million
Dubai’s biggest bank, Emirates NBD, withdrew an advertisement encouraging newly married couples to take loans, amid criticism on social media.
The advert stated: “Begin your married life with the perfect gift” followed by options for loans.
Kuwaiti investor and advisor Ali Al-Salim @alialsalim tweeted the ad and said:
“Begin your married life with the perfect gift" ... debt! Surprising given ENBD's CSR efforts in promoting financial literacy.’”
Twitter user Mohammed Al-Haddad @umar_haddad also commented: “That is the first step in the debt cycle that the majority of young people trapped in and then lately the found out it is difficult to get out it and keep fluctuating with the cycle over and over.”
The Arab Youth Survey 2019 released last week also showed that one in three young Arabs surveyed believe the government has a duty to pay off the debts of all its citizens.
Around 36% of respondents in the GCC said it should be the government’s responsibility to provide financial debt repayment to all its citizens.
It also showed 11% of respondents from the GCC find difficult financial situations to be the biggest source of stress in their daily lives.
A 2014 report by The National newspaper put the blame on the banking sector for tempting young workers into needless debt.
“The culture here in the UAE is that you start with debt from day one,” a financial consultant told the newspaper. “If you start work, then on your first day, banks will approach you because they now know you have earning power – especially if you work in the government. Then you are considered ‘a good potential loan taker’ so they tempt you and run behind you.
“I keep fighting with [my sons] and telling them to hold onto their money... but they don’t listen. They want new expensive cars. Their wives want to travel abroad to show off to their friends, so my sons take out loans so they can travel. I’m worried about them. Now they are all in debt and burdened by their loans,” he said.
User Niamh McBurney @blondearabist also commented on the ad by Emirates NBD, calling it “shocking” considering the role financial strain plays in divorce rates.
“Pretty shocking when you consider how finances factor in to high divorce rates. And the ad doesn’t make sense - take out a loan to buy your own gift...?” she said.
According to the Statistics Centre - Abu Dhabi (SCAD), 1,922 divorce cases were recorded in 2016 compared to 1,813 the previous year, with over 28% of divorced couples not having completed one full year of marriage. Financial strain was among the top reasons for divorce.
Emirates NBD said it had no comment to make in relation to the withdrawal of the advertisement.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.