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Sun 29 Jan 2017 02:19 PM

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UAE loan seekers forced to hunt around to secure finance records a drop in number of loan seekers, but an increase in the number of applications made

UAE loan seekers forced to hunt around to secure finance
With uncertainty in the market, it would appear that UAE consumers are being more careful about taking out credit, said Jon Richards, CEO of

Fewer people in the UAE applied for personal loans in 2016 than the previous year but those who did made multiple applications to different banks, according to new research that highlights the cautious lending landscape in which banks are operating.

Data compiled by shows there was a slight (1.68 percent) drop in the number of people applying for personal loans in the UAE last year compared to 2015, reflecting existing reports of slow loan growth in the region.

However, there was a 10.26 percent increase in the number of applications for loans over the period, suggesting it was difficult for UAE residents to obtain personal finance so they sent multiple applications to different sources, the website said.

Jon Richards, CEO of compareit4me, said: “This could be seen as evidence for the argument that banks were somewhat less willing to give out credit during 2016.

“With the liquidity crunch caused, in part, by low oil prices, banks have had to tighten their belts, and a manifestation of that is that normal consumers see less easy access to personal finance.”

He added: “On the other side of the coin, with uncertainty in the market, it would appear that UAE consumers are being more careful about taking out credit.”

One area did see overall growth, the research showed. The number of people applying for Islamic personal loans increased by 6.85 percent from 2015 to 2016.

However, with an application growth rate of 17.03 percent over the course of the year, it is probable that residents looking to secure Islamic personal finance were also forced to apply for multiple products, it added.

“This isn’t surprising, to be honest,” said COO Samer Chehab. “Islamic banks are facing the same challenges that non-Islamic banks are. With low oil prices permeating almost every aspect of business in the GCC, banks of all kinds are taking a more cautious approach to lending. What this means for consumers is that you may have to apply for several personal loans before seeing an approval.”

The trend is likely to continue over the course of the year, Richards added. “We may see fewer individuals ready to take out personal finance, and those who do want to take out personal loans may find it more difficult to get approvals.”

Emirates NBD’s Salary Transfer Personal Loan for Expatriates was the most applied-for loan last year, according to compareit4me.

This was followed by Dubai Islamic Bank’s Salam Finance product and Abu Dhabi Commercial Bank (ADCB)’s Simplylife Salary Transfer Loan. Commercial Bank International’s Personal Loan was the fourth most applied-for personal loan of 2016, and Abu Dhabi Islamic Bank (ADIB)’s Personal Finance for Expats rounding off the top five.

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Alastair 2 years ago

I wonder if the Etihad Credit Bureau has played a part in this decline. After all banks can now see how much credit is already in the hands of a applicant in terms of cards and loans, while in the past those who already had borrowed need not have disclosed these facts to a new bank where they were applying. This will no doubt show a decline in this market over all.