Today's Edition
LAMEES OBEIDAT (ABU DHABI)
Personal loan demand in the UAE surged 55.8% from the previous quarter, marking a record high, according to the Central Bank of the UAE’s (CBUAE) Credit Sentiment survey published on Thursday. The quarterly survey, which collects qualitative data from Senior Credit Officers across all banks and financial institutions in the UAE, highlighted a strong credit environment driven by both consumer and business lending.
The survey results point to a significant increase in personal credit demand and a higher willingness among banks to offer personal loans. In Q1 2024, personal loan demand reached its highest level on record, with strong growth observed in all segments, including housing loans (particularly owner-occupier), car loans, and credit cards. Improved economic conditions, seasonal influences, and rising real household incomes continue to support this surge.
Business Loans
Business lending also exhibited positive dynamics, with quarterly growth in demand for business credit reaching its highest in over a year.
According to the survey, a notable increase of 53% in credit appetite and demand was observed across all emirates, with the strongest demand in Dubai 55.8%, followed by 50% in Abu Dhabi.
Large firms led the growth, followed by small- and medium-sized enterprises (SMEs), with demand strongest from expats and locals compared to non-residents.
The survey highlighted that credit appetite and demand remain robust across all segments of the UAE economy, with stronger sentiment recorded in trade (47.6%), construction (44.5%), property development (41%), and manufacturing (38.3%).
Current economic conditions and optimism about the outlook continue to support business credit sentiment.
Looking ahead, financial institutions’ expectations remain positive, supporting continued credit appetite to cater to steady loan demand growth by both households and corporates. For the June quarter, robust credit conditions are expected to be maintained.
Personal Loans
The survey results also indicate that the main factors supporting the increase in personal loan demand were improved economic conditions, rising incomes, and seasonal influences.
Personal loan demand for Shari’ah-compliant lending products saw a 57.6% increase, outpaced that of conventional equivalents which saw a 47.4% increase, both reaching record levels.
Survey results indicate a substantial increase in financial institutions’ appetite to extend personal loans. The categories registering the highest increases were personal loans (44.6%), credit cards (45.4%), housing – owner-occupier loans (35.1%), and car loans (34.4%). Credit appetite over the next three months is expected to remain strong across all personal loan categories.
