Daily news brief: Friday, 4th July 2008 Friday being week-end is the time for some relaxed reading. And I found something very interesting, particularly for HR - because Credit applications are getting into an alarmingly increasing rate these days. The report has some interesting statistics too. Calls for credit ‘capping’ system
The National Last Updated: July 03. 2008
Mall of the Emirates’ expectation of a 40 per cent increase in sales during Dubai Summer Surprises has highlighted the need for a federal credit bureau to help tackle rising consumer debt.
Money owed on personal loans and credit cards in the UAE in the last three-month period alone was Dh40 billion – with 70 per cent of it owed in Dubai.
A draft law is being finalised at the Ministry of Justice, establishing a federal credit bureau to function as a national credit data-sharing structure to supervise banks’ lending policies.
The proposal is being backed by Visa, the credit card provider, and has received the support of some of the UAE’s banks. However, a recent investigation by The National found one bank was still prepared to offer four credit cards with one account.
Expatriates who earn more than Dh5,000 a month are offered up to 30 times their salary.
The general manager of the UAE’s largest credit collection service, CRCQ, also supports a national capping system to prevent excessive debt and backs government plans to introduce the federal credit bureau.
“It would be very beneficial to consumers to have a capping system,” he said.
“People are living beyond their means and feel social pressures to drive nice cars and wear nice clothes and so on. It’s globalisation but it is not helped by the fact that banks and financing companies make it easy for people to incur more debt.
“On the positive side, the economy here is booming and it’s a very prosperous society, but on the other, it means the consumers have no savings and high debts.”
Personal loans in the UAE increased by 39 per cent last year, reaching Dh43.6bn compared with Dh28bn in 2006.
Extracted from the THE NATIONAL
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