Competing support is a government incentive that does not meet the requirement of regularity and continuity in the bank loan system

Minister of State for Financial Affairs, Mohammed bin Hadi Al-Husseini, explained that excluding banks from counting Nafees support within the total income of citizens working in the private sector during bank financing operations is due to the fact that Nafees support programs represent government incentives aimed at encouraging the employment of citizens in the private sector, but they do not fully meet the requirement of regularity and continuity stipulated in Article (2) of the bank loan system, indicating that banks may consider, in accordance with their risk management and lending practices, calculating the Nafees program support when evaluating the credit file more comprehensively, provided that this does not conflict with the Central Bank’s supervisory requirements related to determining regular income and calculating the debt burden, and with the commitment to responsible lending and protecting customers..

Al-Husseini said in his response to a question from a member of the Federal National Council, Sheikha Saeed Al-Kaabi, about “ensuring that beneficiaries of the Nafes program are able to obtain loans from banks,” during the Federal Council session held today: “The Central Bank of the Emirates issued the system for bank loans and other services provided to individual customers No. (No.29/2011), and entered into force in May 2011 It was amended and clarifications were issued regarding it during the last period, as the system aims to define the relationship between banks and their individual customers and enhance transparency to ensure responsible financing and protect customers by setting clear controls regarding the limit of the loan amount, the repayment period, and the monthly installments that must be commensurate with the customer’s income, as well as the sources of income that can be relied upon when granting loans, in a way that ensures the customer’s ability to repay his obligations throughout the duration of the loan in proportion to his income and not burden him with additional burdens that exceed his ability to repay.”.

He pointed out that Article (2) of the system stipulates that a personal loan is defined as a loan that is granted to an individual customer and is repaid from the salary, end-of-service benefits, or any other regular income from a known, verifiable source, indicating that the income that banks may rely on must be regular, fixed, and issued by a known source, and its continuity can be verified during the loan repayment period..

Meanwhile, Member of the Federal National Council, Sheikha Saeed Al Kaabi, commented that the government seeks, through the Nafis Program, to enhance the economic and social empowerment of citizens, and to coordinate their role as essential partners in the process of sustainable development in accordance with the UAE’s vision. 2031 By motivating citizens to join the private sector to ensure a better quality of life for citizens, And harmony With what Article Ten of the UAE Constitution stipulates regarding social justice and economic stability, this approach is also consistent with the general policy of the Central Bank of the Emirates. 2023 –2026 Which focuses on enhancing financial inclusion, and ensuring that all segments of society benefit from banking services in a fair and responsible manner.

Al-Kaabi said: “Banking financing for citizens registered in the Nafes program is weak, which limits their ability to find job stability in the private sector and reduces the actual impact of Emiratization policies and enhancing citizens’ participation in the labor market, as banks operating in the country are subject to regulatory approval controls issued by the Central Bank, the most important of which is what is stated in the Financial Consumer Protection Instructions, which require adherence to standards of ability to repay, and that the debt burden not exceed a percentage 50% of net monthly income, and thus creditworthiness is evaluated based on two main elements: a continuous fixed income issued by an approved employer and the duration of continuity of income.”.

She added: “In the case of Nafes beneficiaries, the income consists of two parts, a part from the private employer, and a part from temporary financial support, and since this support is temporary and not guaranteed to continue, banks exclude it from calculating income, and thus deprive the private sector beneficiaries of financing opportunities available to government sector employees, which contradicts the primary goal of the Nafes program, which is to enhance stability.” Economic And social For the citizen, And who here Stand out Need to to intervene Regulatory from before The bank The Central Bank issued instructions to banks requiring the adoption of competitive support as part of sustainable income to assess merit credit, So that Done Dealing with Support As Component Sustainable during period Entitlement, And customize weight credit Related With a duration Support according to Program, We confirm that Need Urgent To develop Solutions Additional, As a generalization Mechanisms Adoption to support Compete To join a guarantee Income Approved, or to lift rate burden Religion For categories Supported Governmentally, or release program a guarantee Loans For beneficiaries With what He achieves Impact The complete For the program, And it enhances Access equitable For financing, And supports success Targets Localization“.