Dubai, 26 January 2016: Personal debt in the UAE is on the rise, with total domestic lending to UAE residents reaching over AED 332 billion. Regardless of the state of indebtedness in the country, demand for personal loans refuses to diminish.
Based on the latest findings by Souqalmal.com, the UAE's #1 financial comparison website, personal loans continue to be the most sought after banking product, making up to over 33 percent of all visits on the site. This is closely followed by credit cards, savings accounts and deposits, and insurance.
Personal loans most sought after product on Souqalmal.com
Personal loans became the most visited product category on Souqalmal.com, composing of one third of all visits on the website in 2015, with the number of visits having more than doubled since 2014. Banking data from the UAE Central bank also shows that total loans to UAE residents have grown by over 5 percent in year-on-year value (as of November 2015).
There are over 90 personal loans listed on Souqalmal.com. About 75 percent of these loans are available to employees of listed companies, while 62 percent of all loans are offered only to those who transfer their salary to the lending bank.
Ambareen Musa, CEO and founder of Souqalmal.com also revealed:
"Within personal loans, non-salary transfer loans emerged as the most popular type. This could be attributed partly to customers with existing salary transfer loans or those who have other obligations and cannot commit their salary to a certain bank. The other reason could be the customers who get their salaries in cash or by cheques as well as those who get paid on a commission basis, and therefore cannot show a regular salary transfer in their bank statements."
Credit cards rank second with consistent increase in usage in the UAE
With visits on Souqalmal.com's credit card pages increasing by 241 percent in 2015, credit cards became the second most-visited product on the website, constituting 22 percent of total visits recorded in the past year.
Credit card usage in the UAE has also increased over the last few years, according to the UAE Central Bank, with point-of-sale transactions growing at a Compound Annual Growth Rate of 24 percent since 2010.
Credit cards are within the reach of most UAE residents, where the site's data shows that out of the 245 credit cards listed on the website, 67 percent have a minimum salary requirement of AED 10,000 or lower. More than half of all existing credit cards in the market also come at zero annual fee which makes owning one even more affordable.
Within credit cards, cashback is the most sought after reward based on visits for each card category on Souqalmal.com. Approximately one third of all cards in the UAE offer cashback as a feature. In terms of popularity, this is closely followed by cinema rewards and air miles. While the former offers cardholders 'buy 1 get 1 free' movie tickets, discounts on popcorn, beverages and such, air miles-linked credit cards allow users to convert their card spend into flight tickets. About 46 percent of all cards in the UAE offer air miles either directly or indirectly in the form of points that can be converted to air miles, and 27 percent offer cinema rewards as part of their main features.
Savings accounts and fixed deposits attracting more visits
Accounts that offer returns in terms of interest or profit, became the third most popular product category on Souqalmal.com. UAE residents are becoming more conscious about maximizing the returns on their savings and are thus turning to savings accounts and fixed deposits.
Out of the 294 accounts listed on Souqalmal.com, 148 are fixed term deposits, 63 are savings accounts and 53 are current accounts. Savings accounts are a feasible choice for the masses with minimum balance requirements starting at only AED 3,000. Fixed deposits are affordable too with minimum deposit requirements ranging from AED 5,000-10,000.
Musa also shared other findings:
"In terms of returns, the average annual return on savings accounts in the UAE is 0.60 percent and just under 1 percent on fixed term deposits of varying maturities. Overall, the accounts category constituted 14 percent of all visits in 2015, almost double that of 2014."
Insurance page visits register fivefold increase in one year
Another interesting trend that became apparent in 2015 was a substantial increase in the number of people looking for insurance products online. Visits on Souqalmal.com's insurance pages formed 13 percent of overall visits on the site. Insurance category visits also recorded the maximum increase in the last year, growing fivefold in 2015.
A further analysis of this data revealed that car insurance and health insurance made up over 80 percent of visits across various insurance categories. The increase in health insurance visits can be attributed to the mandatory health insurance law introduced by the Dubai Health Authority last year.
Mortgages however, showed signs of stability
The share of visits on Souqalmal.com's mortgage pages saw a decline of 3 percent, and there was a relatively lower increase in visits for mortgages when compared to other products. This is likely due to the real estate market stabilizing in the UAE in 2015.
With the new mortgage regulations and the revised cap on Loan-to-Value being introduced in late 2013, it is not a surprise that mortgages were not the most popular personal finance product amongst UAE residents.
All product categories combined, Souqalmal.com registered a significant increase of 175 percent in overall visits on the website in 2015, as compared to the previous year. More UAE residents are now becoming increasingly aware of the many advantages of 'comparing before committing'.
About Souqalmal.com:
Souqalmal.com is the #1 financial comparison site in UAE allowing users to compare retail banking products like credit cards, loans, accounts and insurance, as well as telecom and education products.
For Media and PR queries:
Josiane Assaad, Head of Content
josiane@souqalmal.com
© Press Release 2016
