The United Arab Emirates’ banks have agreed a plan to help small-and-medium-sized businesses struggling with debt.
This follows a rise in the number of loan defaults as low oil prices hit business sentiment across the region.
Under plans outlined by the UAE Banks Federation yesterday, companies that owe debt to more than one bank will be able to restructure their future payments, according to Reuters.
Payments can also be suspended to allow time for businesses to reach a debt deal with lenders, the federation said.
“This again reflects banks’ commitment to apply a coordinated approach, to alleviate SME funding difficulties and continue banks’ support to the SME sector being vital to the national economy,” said federation chairman and Mashreq bank chief executive Abdul Aziz al-Ghurair.
A number of banks in the country have reduced their lending to SMEs after a series of defaults.
In November, Al Ghurair said business people had fled the country with unpaid debts of $1.4bn in 2015.