A senior official from the UAE Banks Federation (UBF) said on Thursday that the country’s recent decision to remove the Dh5,000 minimum salary requirement for personal loans will not make the entire workforce eligible for borrowing, despite the policy shift being welcomed as a major step toward wider financial inclusion.
The UAE Central Bank announced earlier this week that it had eliminated the long-standing salary threshold that previously limited access to personal loans. The change is expected to open doors for millions of low-income residents who were previously unable to apply for credit, marking a significant update in the country’s retail banking landscape.
“It is a very positive development. It’s to support financial inclusion. Let financial institutions decide what kind of lending they want to do,” said AbdulAziz Abdullah Al-Ghurair, chairman of the UBF, in an interview with Khaleej Times. He added that banks now have more flexibility in assessing applicants, but he stressed that this flexibility does not mean automatic approval for all workers.
When asked whether the entire employed population in the country would now be eligible for personal finance, Al-Ghurair responded firmly: “Of course, no.” He explained that many low-wage earners, especially blue-collar workers, pose higher risks to lenders due to job instability and limited repayment capacity.
Al-Ghurair, who also chairs Mashreq bank, said financial institutions will now be required to carry out deeper assessments before approving loans for residents earning below the previous threshold. “What loan can a driver who makes Dh3,000-Dh4,000 afford? The lower you go, the higher the risk. These jobs are volatile and risky, and people lose their jobs,” he said. “If we are giving a 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.”
Industry analysts say the new rules give banks the chance to incorporate a wider segment of the population into the formal financial system, though with greater responsibility on lenders to evaluate risk profiles carefully.
Mohammad Kamran Wajid, deputy CEO of Emirates Islamic, said the removal of the Dh5,000 minimum requirement will allow banks to reach previously unbanked residents who meet regulatory standards and comply with KYC checks. “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 said.
As banks adjust their lending strategies, financial experts expect a gradual expansion in access to credit but with strict screening to ensure borrowers can manage repayments responsibly.
