The UAE Central Bank’s decision to eliminate the minimum salary requirement for personal loans has been met with widespread enthusiasm among residents, though financial experts urge caution. The move, which allows banks to set their own minimum thresholds based on internal risk policies, is expected to expand access to credit for thousands of previously unbanked individuals, particularly low-income workers. However, concerns have been raised about the potential for increased borrowing for non-essential purposes. Pakistani expat Mohammed Haroon, a Dubai-based driver earning Dh4,000 monthly, expressed relief, stating the policy change came at a crucial time as he sought funds for his daughter’s wedding. Financial advisor KV Shamsuddeen highlighted the dual impact of the policy, noting it could reduce reliance on illegal loan sharks but also lead to unnecessary debt accumulation. He emphasized the need for enhanced financial literacy programs to educate workers on responsible borrowing. Industry analysts predict the shift will spur innovative lending products, such as micro-financing and savings-linked credit options, tailored to entry-level employees. While the policy is seen as a progressive step toward financial inclusion, experts stress the importance of cautious implementation to mitigate risks.
UAE residents welcome removal of minimum salary for loans; experts advise caution
