The Credit Sentiment Survey of the Central Bank of the UAE (CBUAE) has reported the strength of supply and demand for credit in the country, in line with the continued growth of business and consumer credit.
The Credit Sentiment Survey projects a rise in commercial loan demand across various sectors in the country, notably in retail, real estate, construction, and manufacturing. Personal credit demand has surged, with banks showing increased willingness to offer personal loans. The Central Bank underscores consumer spending's role in economic growth, noting strong corporate lending dynamics, particularly in Dubai, with expectations of sustained commercial loan demand in the coming months.
According to survey results, demand growth was strongest for large firms, with solid growth from small and medium-sized enterprises (SMEs) as well. By country of residence, demand growth was strongest from expats and locals, while growth from non-residents was moderate in comparison.
Looking forward, survey results suggest solid aggregate loan demand, driven by strong demand from large firms, followed by SMEs and government-related entities (GREs).
Credit demand was robust across all industry classifications, with March quarter results above their long-run average across the board. Growth was highest in the retail and wholesale trade sector, followed by construction, property development and manufacturing.
Business loan demand is expected to increase further across all economic sectors over the next three months, primarily in the retail and wholesale trade, property development, construction, and manufacturing sectors.
Survey respondents cited improved economic conditions, working capital needs, and investment as key drivers for loan demand. By contrast, interest rates negatively influenced demand.
The Credit Sentiment Survey was launched in 2014 as part of the CBUAE’s efforts to gauge both supply and demand-side factors influencing the local credit market, and to further understand the linkages between credit sentiment and the broader UAE economy.
News Source: Emirates News Agency
