The volume of family credit in the banking sector in the UAE reached about $115 billion last year, according to the latest statistics of the Arab Monetary Fund.
The fund said that the volume of family credit in the Saudi banking sector amounted to about $331.6 billion during the same period.
He pointed out that in terms of growth, the Algerian banking sector achieved first place with its family credit growing at a rate of 12.8% last year compared to 2022, while the banking sector in the UAE came in second place with a growth rate of 11.3%.
The ratio of family credit to the total private credit in the banking sector in the Arab countries was about 38% at the end of last year, compared to 37.1% at the end of 2022.
The Arab Monetary Fund explained that there has been a continuous improvement in the quality of the family credit portfolio since the “Covid-19” pandemic, stressing the importance of the role played by credit information offices and companies in rationalizing credit granting decisions based on an accurate assessment of customer risks and loan pricing.
He praised the efforts of central banks and Arab monetary institutions to assess family credit risks, noting that the UAE Central Bank conducts regular assessments of systemic risks, which include the risks of the individual sector, pressure points, and objective analysis of the risks emerging in this sector. It also closely monitors the individual sector through numerous indicators. Among them: loan growth, non-performing loans, and delinquency in asset quality.
The Central Bank also applies a credit risk framework, which outlines the methodology for setting risk limits and guidelines, as well as operational procedures to ensure compliance and manage the occurrence of violations.
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