UAE credit demand to continue rising slowly in Q3 - central bank survey

A higher percentage of UAE financial institutions expect no change in demand growth for Islamic business credit than for conventional loans for the current July to September quarter (Q3), reported a central bank survey released on Sunday.

UAE central bank's quarterly credit sentiment survey collects information from senior credit officers from all banks and financial institutions extending credit within the country. 

According to survey respondents, demand for business credit increased moderately in Q2.

For Q3, 72.4 percent of respondents expect no change from Q2 in the demand growth for Shariah-compliant business financing. This is much higher than the 56.6 percent of respondents who said they expect no change in demand growth for conventional business loans. 

However, a higher 33.7 percent of respondents said they expect demand growth for conventional business loans to increase moderately compared to a lower 23.5 percent for Shariah-compliant business financing. 

PERSONAL CREDIT

Demand for personal credit in aggregate slightly increased in Q2 but to a lesser extent than in Q1, said the survey report.

The expectation for no change in demand for both Islamic and conventional personal credit is almost equal, at 69 percent for conventional loans and 66.8 percent for Islamic financing. 

The situation is similar for expectation of moderate increase in demand for personal credit, with 26.7 percent for Islamic financing and 25.7 percent for conventional loans. 

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