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UAE Private Sector fared worst in Global Recession


United Arab Emirates : 27 April 2010

It was the UAE private sector that appears to have been the worst hit by the economic slowdown in terms of credit being extended by its banks a recent report states. This report studied the credit provided by the regions 52 financial institutions to the private sector and lending to this sector plummeted during 2009 being down by over 23 billion in total. In contrast for the same period loans awarded to the government increased by approximately 27%.

The credit afforded to other public service sectors was also up by 28% which showed that the banks were far more likely to lend to the government sectors as they viewed these loans as being good solid return options as compared to the riskier options of the private sector.

The report also stated that the industrial and private business sectors were the least hit by the 2009 credit crunch with overall loans to this sector increasing by approximately Dh14 billion during the period concerned. Financial institutions were also reported to have been significantly affected by the slow down.

The report also showed that real estate mortgage loans decreased significantly during the period because of the property crises and the banks stricter lending practices. Personal loans were also down for the year.

Paul Holdsworth, Staff Writer, Gulf Jobs Market News
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