No Dh5,000 salary requirement for personal loans: Will UAE banks lend to all residents?

21/11/2025 04:09 AST

Despite the UAE's decision to remove the Dh5,000 requirement for personal loans, not the entire workforce in the country will be eligible for personal finance, a senior official of the UAE Banks Federation (UBF) said on Thursday.

As reported earlier, the UAE Central Bank scrapped the long-standing minimum salary requirement of Dh5,000 for personal loans to widen access to credit for millions of low-income residents.

"It is a very positive development. It's to support financial inclusion. Let financial institutions decide what kind of lending they want to do," AbdulAziz Abdullah Al-Ghurair, chairman of UBF, told Khaleej Times in an interview on Thursday.

However, he ruled out that the entire workforce in the country will be eligible for the personal loans, as many blue-collar workers increase the risk factor for the banks.

"Of course, no," the UBF chief said when asked if the entire eligible workforce in the country would get personal loans.

More due diligence
Al-Ghurair, who is also the chairman of Mashreq bank, noted that banks will have to do much more due diligence of applicants, especially for the low-income workforce, due to a higher risk factor.

"What loan can a driver who makes Dh3,000-Dh4,000 afford? The lower you go, (the higher the risk). These (low-paid) jobs are volatile and risky, and people lose their jobs. If we are giving loan to a farmer who gets Dh2,000, if he loses his job, what do I do? Of course, there will be a lot of due diligence by banks because of the higher risk charge," he said.

Mohammad Kamran Wajid, deputy CEO of Emirates Islamic, said the decision to remove the Dh5,000 requirement for personal loans allows banks to tap the unbanked market, which is regulatory compliant or from a KYC perspective.

"More people will become bankable. From banks' perspective, the risk gets diversified even more because banks will have a wider population to bank with," he added.

Khaleej Times