18.3 billion dirhams “personal loans” within 3 months

The latest statistics issued by the Central Bank showed an increase in personal loans for “consumer purposes” that banks granted to customers worth 18.3 billion dirhams, from the end of December 2024 to March 2025.

Two experts considered to “Emirates Today” the growth of personal lending is a natural matter in light of the growth of the economy, the recovery witnessed by various sectors, pointing out that it reflects consumers’ confidence in the stability of the economy, increased dependence on financial facilities to improve the quality of life, or meet different consumption needs.

They attributed the high loans to consumer purposes, to the requirements and conditions of financing, as they are easy, compared to business loans, at a time of cautiousness of the risks of increasing personal loans, as it may lead to a high level of personal debt, which may pose a burden on individuals in the event of income fluctuation or economic conditions of some families.

In detail, the latest statistics issued by the Central Bank revealed that the banks operating in the country granted personal loans to “consumer purposes” at a value of 18.3 billion dirhams, within only three months, specifically from the end of December 2024 to March 2025, bringing the total value of personal loans for consumer purposes until the end of March 2025 to 520.6 billion dirhams, recording the highest level in its history, compared to 502.3 billion Dirham at the end of last December.

The statistics of the “Central” also showed that the personal loans for “the purposes of work” witnessed a clear fluctuation, up and down, and if it tended to decline in many times, to reach 86.4 billion dirhams at the end of March 2025.

The banking expert, Amjad Nasr, told «Emirates Today»: “The growth of banking borrowing for residents in the UAE is a natural matter, in light of the great economic growth, the noticeable real estate boom in the state, as well as the recovery of the tourism sector, the high demand for the establishment of companies, and the increase in private investments.”

He added that the growth of the economy has led to a growth in employment opportunities and the recruitment of employment, and thus the growth of requests that own or rent homes, invest in projects inside and outside the country, and pay school expenses and travel abroad and others.

Nasr attributed a large part of the loans to consumer purposes, to the requirements and conditions of financing, as they are easy, compared to business loans, and said: “Consumer loans require simple conditions, such as that the borrower is fixed in his work, while transferring the salary for several months regularly, while business loans and loans require more difficult requirements related to the availability of commercial licenses with certain conditions, and providing what indicates that the chances of success of the project High, ”noting that the banks are usually reserved in financing business activities in their beginnings, due to fears of the project’s stumbling and the difficulty of paying commercial financing.

Nasr suggested to banks to create specialized funds to study innovative projects for entrepreneurs and finance the best of them, thus leading to increase the profits of banks.

For his part, the economist, Ali Al -Hamoudi, said: “The great rise in personal loans for consumer purposes in the country indicates several economic connotations, foremost of which is the continuous confidence in the economy,” explaining that the increase in the demand for personal loans reflects the confidence of consumers in the stability of the economy, increasing dependence on financial facilities to improve the quality of life, or meeting various consumer needs.

Al -Hamoudi pointed out that the presence of greater flexibility in the procedures for obtaining personal loans, and providing some banks in promotional offers such as low interest rates, stimulates consumers to benefit from them.

He also pointed out that “the rise in consumer loans may also indicate an increase in the consumption of goods and services, which may sometimes be linked to the desire to maintain a specific lifestyle, or respond to marketing offers that may be attractive.”

Al -Hamoudi warned at the same time the risks of increasing personal loans, as it may lead to a high level of personal debt, which may pose a burden on individuals in the event of fluctuating income or economic conditions of some families, as well as the risk of stumbling in payment if things are not properly destroyed by borrowed individuals, which may affect its role directly in the banking sector.

Regarding the decrease in business loans, Al -Hamoudi said: “The decline may reflect a state of caution in the business sector, or a saturation in some sectors that do not see the necessity for borrowing, as there may be preferences for self -investment, or in receiving funding from investment sources other than bank loans.”

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