UAE’s personal loans slow down in Jan-July

Personal loans extended by UAE banks sharply slowed down in the first seven months of 2009, according to a report.

Spending appetites seem to have been affected by the global downturn, resulting in poor public confidence, according to the Emirates Business daily.

According to the central bank, personal loans rose by only 0.7 percent to AED208.8bn ($57bn) at the end of July, from around AED207.2bn ($56bn) at the end of 2008, the newspaper added.

The loans had declined to AED203.8bn by the end of February and continued dipping to reach AED202.7bn in March and AED201.7bn in April. They rose to around AED207.6bn, before slipping to AED205.2bn in May, according to Emirates Business.

The slackening growth was in tandem with a general slowdown in total loans, which grew by only around 1.4 per cent to AED1,007 trillion at the end of July from around AED993.7bn at the end of 2008. This compares with a growth of nearly 7.5 per cent in the H2 of 2008, the daily added.

Last week, Mashreq Bank said that it has launched the UAE’s first debt counselling service for customers struggling to repay their loans.

Mashreq Assist has been set up with the sole purpose of helping individuals and small and medium sized enterprises restructure their outstanding cards, loans and facilities.

The UAE’s third biggest bank by market value said that an increasing number of customers over the last few months have come to the company asking for financial counselling and support.