Bank financing for individuals jumps by AED 9.4 billion in a month

Banks operating in the country granted individuals financing worth 9.4 billion dirhams during last June alone, which represents an exceptional leap since before 2008.

These financings include personal loans, credit cards, car purchases, and financing the construction of private homes.

The latest data issued by the Central Bank yesterday showed that the total cumulative balance of individual financing reached 450.7 billion dirhams by the end of last June, compared to 441.3 billion dirhams by the end of the previous May, with a monthly increase of 9.4 billion dirhams, equivalent to a growth rate of 2.1%.

Commenting, the financial and economic expert, Mohammed Al-Mahri, said that financing individuals is an integral part and occupies a large share of the banks’ operational activity, as they always focus on them in all seasons, and allocate products to them that meet their needs with offers that encourage them to request.

He pointed out that the economic cycle in any country depends on individuals in addition to companies, stressing that in the UAE there is a strong system that ensures verification of the customer’s creditworthiness, represented by the credit inquiry from the Union Credit Information Company, before granting loans.

Al-Mahri added to “Emarat Al-Youm” that economic activity, the prosperity of markets and businesses, and the increase in jobs and salaries all support the demand for personal financing, especially since part of it is directed towards investment, establishing small businesses, building a home, paying tuition fees, etc.

He stated that all these reasons are acceptable and support rational borrowing away from consumer borrowing, as individuals have become more aware and conscious compared to previous years.

He pointed out that the UAE has a large number of residents of different nationalities and cultures, which creates a diverse demand for bank financing for several reasons. All of this is met by an abundance of liquidity and financial solvency in the banking sector, with all its banks and companies, enabling it to play its vital role in economic growth.

According to the Central Bank’s data, private sector financing rose by the end of the monitoring month (June 2024) to 1 trillion and 306.4 billion dirhams, compared to 1 trillion and 293.2 billion dirhams by the end of the previous May, with a monthly increase of 13.2 billion dirhams, representing a growth of 1%.

Among the private sector financing, financing the commercial and industrial sectors amounted to 855.7 billion dirhams at the end of last June, compared to 851.9 billion dirhams at the end of May, an increase of 3.8 billion dirhams.

Banks continued to increase their investments, with total investments reaching AED 680.2 billion by the end of last June, compared to AED 673.1 billion by the end of the previous May, with a monthly increase of AED 7.1 billion, equivalent to a growth rate of 1.1%.

Total investment in stocks at the end of last June amounted to 16.7 billion dirhams, compared to 16.4 billion dirhams at the end of the previous month.