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UAE Personal Credit Ratings Office Seen Next Year - ASHARQ AL-AWSAT English Archive
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ABU DHABI, (Reuters) – The United Arab Emirates finance ministry expects to launch a scheme to assess individuals’ credit worthiness within the next six months, a minister of state in the Gulf country said on Monday.

The new credit bureau should help banks, already exposed to debts of Dubai’s state-linked companies, make better decisions when lending to individuals in the second largest Arab economy.

“This is a very important law and … it went through the legislative process,” Minister of State for Financial Affairs Obaid Humaid al-Tayer told reporters on the sidelines of a Gulf rulers summit in Abu Dhabi. “We hope to finish the procedures during the next six months.”

He confirmed earlier comments by UAE’s parliamentary speaker that president Sheikh Khalifa bin Zayed al-Nahayan had already approved the bill.

The global credit crunch exposed borrowing excesses in the OPEC member, where expatriates and nationals alike enjoyed lavish lifestyles helped by easy credit during the oil-fueled boom years.

“(The credit bureau) provides complete transparency on the status of clients and the bank would have a clear vision,” Federal National Council (FNC) speaker Abdul Aziz al-Ghurair told journalists at the two-day summit.

“This helps banks as well as clients avoid uncertainty,” he said.

Ghurair, who is also the CEO of Dubai-based Mashreq Bank, said the scheme will make the banking system in the world’s third largest oil exporter more conservative.

“No doubt, more conservative in a positive way, it would be better for clients not to borrow more than they can afford and preserve reputation of the banking sector,” he said.

The FNC, a parliamentary body which monitors and debates the government policy but cannot initiate any legislation by itself, passed the credit rating bureau bill last year.

Its members have complained that the missing credit rating office left thousands of UAE citizens and residents exposed to heavy borrowing used for car and house mortgages as well as credit cards.

Some exploited the shortfalls, taking loans at different banks then fleeing the country later without paying them back.

Asharq Al-Awsat

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

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