UAE president Sheikh Khalifa bin Zayed Al Nahyan has ordered the settlement of defaulting personal loans of citizens whose debts are less than Dhs5 million, official news agency WAM reported on Sunday.
The move will apply to UAE nationals who are “in detention, pending trial, convicted, or settling their debts through installment schedules set by the courts,” the report said.
It follows the recommendation submitted by the Supreme Committee of the Debts Settlement Fund for Citizens with limited income, the report added.
As part of the UAE National Day celebrations in December last year, Sheikh Khalifa had issued a resolution setting up a Dhs10 billion fund to settle the personal loans of nationals with limited income.
The fund would coordinate with the UAE Central Bank and other banks in the country to facilitate the repayment of the loans, the government said.
In January this year, the UAE government announced that it would settle Dhs2 billion of debt owed by 6,830 nationals, including some who were detained for defaulting on loans.
Two months later, the UAE’s central bank also instructed lenders in the country to help reduce the debt burden of UAE nationals. The bank reportedly found that citizens were paying high repayment installments, it said in a statement.
“To alleviate the financial burden on UAE nationals, the board instructed further study and more cooperation and coordination from concerned agencies in order to find solutions,” the bank said.