Laws that govern credit reporting bureaus have not kept pace with the rising tide of consumer debt, industry officials have warned. Jamal M Saleh, the head of risk management at the Commercial Bank of Dubai, said that because of the lack of clear regulatory guidelines, banks are reluctant to divulge consumers' data, even if a credit agency was to ask for it. "No one wants to volunteer information if there isn't clearance from regulators," Mr Saleh said. "Right now, we have very important confidentiality regulations."
The law stipulates that banks must treat consumers' data as "confidential except for statistical data that may be published on an aggregate basis". The lack of clear legislation has become particularly topical as debt levels in the UAE continue to rise. The fear is household debt could spiral out of control, much as it did in the US, where a mountain of mortgage debt has pushed many homeowners to the edge of bankruptcy.
Other countries in the Gulf have effective credit reporting agencies, but the UAE has lagged behind. A centralised bureau, Emirates Credit Information Limited, or Emcredit, already exists, but its data collection is restricted under current environment. With better laws, Emcredit would gather more detailed information, said Zaid Kamhawi, the business development director at the bureau. "It would be a keystone for us."
The Dubai-based Emcredit is bound by Dubai International Financial Centre's (DIFC) confidentially regulations, until a federal law is adopted, Mr Kamhawi said. The company has data on 35 per cent of mortgage borrowers in the country, and the personal details of 5.6 million people. He said the company is talking to banks to supply it consumers' data when the law permits. However, it would take time to compile an effective database.
"Bigger banks have more to gain than smaller banks because they are more exposed to the credit market," Mr Kamhawi said. He said that 20 per cent of the country's banks issued 80 per cent of the country's loans. Mr Kamhawi added that Emcredit is also lobbying for a federal law to allow cross-border information sharing. Nasser Saidi, the chief economist at DIFC, said that an effective credit reporting agency would not only protect lenders and the market, but it would also create a more favourable credit environment.
"It would reduce risk because of better understanding of borrowers, and increase access to credit," Mr Saidi said. "Secondly, the cost of getting financing would be reduced, which would help capital markets and mortgage financing." Credit bureaus supply information about a consumer's incurred debt, repayment history and financial health, to a lender such as a mortgage bank. A centralised credit reporting system is therefore crucial to identifying bad risks. Credit reporting bureaus in developed markets are the pillars of the lending industry. In the US, for example, lenders buy a history of a potential borrowers' financial obligations, and assign him a standardised score. Credit bureaus compile the data on consumers from the information that financial services companies, like banks, supply them.
Credit bureaus in Saudi Arabia, Kuwait and Bahrain have been operating much the same way for a few years but the two-year-old Emcredit has been hampered by lack of clear laws at the federal level. In the US, financial institutions are allowed by law to share consumers' credit history with credit bureaus. They regularly sell consumers' credit information to lenders, especially credit card issuers. Employers too are allowed to purchase the credit history of potential employees.
Emcredit, which does not have this level of access to data, is therefore restricted in what information it can provide. As recently as this week, the Federal National Council officials pressed for tighter lending measures, and the fast-tracking of a centralised credit reporting agency. A committee report said that consumer debt in the nation reached Dh43.46 billion (US$12 bn) at the end of last year, a jump of almost 40 per cent from 2006.
Overall, the UAE's ratio of consumer debt, at nine per cent, compares well with many other markets; the UK is saddled with a debt ratio of 100 per cent. But the country's explosive economic growth rate, together with the type of debt that is mostly incurred, has lenders and the government worried. Ian Reed, the general manager of the credit consulting company PIC Solutions, said that while more than 90 per cent of the UK's consumer debt is mortgage-related, in the UAE its mostly from personal loans and credit cards.
This is debt which is not secured by assets, and thus less likely to be recovered. "I'll be very surprised if more than 50 per cent of debt in this country is secured," he said. "The over-indebtedness is not a crisis yet but it's at a level that should become a concern." Another risk for lenders is that a large proportion of borrowers are expatriates. They arrive in the country and open bank accounts, apply for credit cards and for car and housing loans.
"The UAE faces a unique challenge in the GCC in that most people can just pick up and leave," Mr Reed said. "Banks here have this extra element of risk." Saudi Arabia's Simah, Kuwait's Ci-net and Bahrain's Benefit Company are bank-owned credit bureaus. "Very generally speaking, the quality of data they provide in terms of the information they provide is very good and compares very favourably with developed markets," Mr Reed said. "They provide information about consumers' complete credit history."
mjalili@thenational.ae
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Milestones on the road to union
1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.
Director: Laxman Utekar
Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna
Rating: 1/5
Hotel Silence
Auður Ava Ólafsdóttir
Pushkin Press
Haircare resolutions 2021
From Beirut and Amman to London and now Dubai, hairstylist George Massoud has seen the same mistakes made by customers all over the world. In the chair or at-home hair care, here are the resolutions he wishes his customers would make for the year ahead.
1. 'I will seek consultation from professionals'
You may know what you want, but are you sure it’s going to suit you? Haircare professionals can tell you what will work best with your skin tone, hair texture and lifestyle.
2. 'I will tell my hairdresser when I’m not happy'
Massoud says it’s better to offer constructive criticism to work on in the future. Your hairdresser will learn, and you may discover how to communicate exactly what you want more effectively the next time.
3. ‘I will treat my hair better out of the chair’
Damage control is a big part of most hairstylists’ work right now, but it can be avoided. Steer clear of over-colouring at home, try and pursue one hair brand at a time and never, ever use a straightener on still drying hair, pleads Massoud.
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UAE currency: the story behind the money in your pockets
STAGE%201%20RESULTS
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The Dictionary of Animal Languages
Heidi Sopinka
Scribe
Fatherland
Kele Okereke
(BMG)
Zakat definitions
Zakat: an Arabic word meaning ‘to cleanse’ or ‘purification’.
Nisab: the minimum amount that a Muslim must have before being obliged to pay zakat. Traditionally, the nisab threshold was 87.48 grams of gold, or 612.36 grams of silver. The monetary value of the nisab therefore varies by current prices and currencies.
Zakat Al Mal: the ‘cleansing’ of wealth, as one of the five pillars of Islam; a spiritual duty for all Muslims meeting the ‘nisab’ wealth criteria in a lunar year, to pay 2.5 per cent of their wealth in alms to the deserving and needy.
Zakat Al Fitr: a donation to charity given during Ramadan, before Eid Al Fitr, in the form of food. Every adult Muslim who possesses food in excess of the needs of themselves and their family must pay two qadahs (an old measure just over 2 kilograms) of flour, wheat, barley or rice from each person in a household, as a minimum.
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The Bio
Name: Lynn Davison
Profession: History teacher at Al Yasmina Academy, Abu Dhabi
Children: She has one son, Casey, 28
Hometown: Pontefract, West Yorkshire in the UK
Favourite book: The Alchemist by Paulo Coelho
Favourite Author: CJ Sansom
Favourite holiday destination: Bali
Favourite food: A Sunday roast
Karwaan
Producer: Ronnie Screwvala
Director: Akarsh Khurana
Starring: Irrfan Khan, Dulquer Salmaan, Mithila Palkar
Rating: 4/5
More on animal trafficking
Results:
Men's wheelchair 800m T34: 1. Walid Ktila (TUN) 1.44.79; 2. Mohammed Al Hammadi (UAE) 1.45.88; 3. Isaac Towers (GBR) 1.46.46.
From Europe to the Middle East, economic success brings wealth - and lifestyle diseases
A rise in obesity figures and the need for more public spending is a familiar trend in the developing world as western lifestyles are adopted.
One in five deaths around the world is now caused by bad diet, with obesity the fastest growing global risk. A high body mass index is also the top cause of metabolic diseases relating to death and disability in Kuwait, Qatar and Oman – and second on the list in Bahrain.
In Britain, heart disease, lung cancer and Alzheimer’s remain among the leading causes of death, and people there are spending more time suffering from health problems.
The UK is expected to spend $421.4 billion on healthcare by 2040, up from $239.3 billion in 2014.
And development assistance for health is talking about the financial aid given to governments to support social, environmental development of developing countries.
More from Rashmee Roshan Lall
Abu Dhabi Sustainability Week
Results
5pm: Wadi Nagab – Maiden (PA) Dh80,000 (Turf) 1,200m; Winner: Al Falaq, Antonio Fresu (jockey), Ahmed Al Shemaili (trainer)
5.30pm: Wadi Sidr – Handicap (PA) Dh80,000 (T) 1,200m; Winner: AF Majalis, Tadhg O’Shea, Ernst Oertel
6pm: Wathba Stallions Cup – Handicap (PA) Dh70,000 (T) 2,200m; Winner: AF Fakhama, Fernando Jara, Mohamed Daggash
6.30pm: Wadi Shees – Handicap (PA) Dh80,000 (T) 2,200m; Winner: Mutaqadim, Antonio Fresu, Ibrahim Al Hadhrami
7pm: Arabian Triple Crown Round-1 – Listed (PA) Dh230,000 (T) 1,600m; Winner: Bahar Muscat, Antonio Fresu, Ibrahim Al Hadhrami
7.30pm: Wadi Tayyibah – Maiden (TB) Dh80,000 (T) 1,600m; Winner: Poster Paint, Patrick Cosgrave, Bhupat Seemar
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
David Haye record
Total fights: 32
Wins: 28
Wins by KO: 26
Losses: 4
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Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
UAE currency: the story behind the money in your pockets
Company%20profile%20
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MATCH INFO
Uefa Champions League semi-final, first leg
Barcelona v Liverpool, Wednesday, 11pm (UAE).
Second leg
Liverpool v Barcelona, Tuesday, May 7, 11pm
Games on BeIN Sports
What are the influencer academy modules?
- Mastery of audio-visual content creation.
- Cinematography, shots and movement.
- All aspects of post-production.
- Emerging technologies and VFX with AI and CGI.
- Understanding of marketing objectives and audience engagement.
- Tourism industry knowledge.
- Professional ethics.
