UAE - Demand for personal loans among the UAE residents remained steady during the last quarter of the last financial year (FY) and banks predict that more people would opt for personal loans, according to a new survey.
The Credit Sentiment Survey by the UAE Central Bank revealed that demand for personal loans remained strong in Abu Dhabi and northern emirates but softened in Dubai.
The Credit Sentiment Survey is a quarterly publication of the UAE Central Bank, which collects information from senior credit officers from all banks and financial institutions extending credit within the country.
With the reopening of the economy despite the Covid-19 pandemic, confidence among residents is on an upswing, as the job sector stabilises, albeit slowly and steadily. An improved sentiment encourages residents to increase spending as well as invest more.
“For the December quarter, demand for personal loans remained unchanged. The muted demand was attributable to the weakening of demand in Dubai, which was offset by a strengthening of demand in Abu Dhabi and northern emirates,” said the survey.
With respect to expectations for the first quarter 2021, survey respondents expect the demand for personal loans to recover with a notable increase. Survey respondents predicted a rise in demand appetite across all the emirates.
For the March 2021 quarter, the UAE banks expect to see an increase in personal loans across all categories, most evidently in personal – such as credit card and housing from both Islamic and conventional variants.
In terms of expectations for Q1 2021, survey respondents cited change in income, financial and housing market outlook, and interest rates are likely to influence demand for personal loans.
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