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Research Shows 22% of Expatriates in the UAE Defaulted on Debt

UAE : 30 July 2010

Over one fifth of UAE expatriates needed to default on their credit card or loan payment during the last year, according to Datamonitor’s research

Reports stated 19.7 per cent of nationals in the UAE could not meet their debt obligations, while 22.1 per cent of foreign clients could not.

In reaction, the banks are working to increase Emirati business.  With more secure employment and better earnings this clientele are more attractive credit risks as reported by UAE newspaper,  The National.

This type of customer profiling that looks at both personal historical credit data and native country is likely to become the norm as the sophistication of credit checks grows in the UAE.

Datamonitor consulting analyst Richard Adams commented in the UAE daily that the credit market has an opportunity to increase profits with this type of detailed client information and that a variety of rates may be available based on the results of customer profiles.

Also, competition between banks is expected to rise as international institutions look to gain more business from the Emiratis, who have traditionally been loyal to local banks.

Foreign banking firms are trying to offer lower mortgage rates and more attractive automobile loans in an effort to draw in business, as reported by Al-Futtaim HC Securities banking analyst Janany Vamadeva in the National.

The property market crash and shrinking UAE job market caused expats to leave by the thousands, forcing a collection of banks to write off those debts.

Paul Holdsworth, Staff Writer, Gulf Jobs Market News
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