Banks across the UAE are turning cautious on lending norms and are likely to tighten loans to SMEs, individuals, and lower-rated corporates as they fear a considerable spike in bad loans in the future. This is despite the fact that the economic conditions have improved significantly lately, and the lending rates are set to rise in the coming months. Even the latest credit sentiment survey of the Central Bank of the UAE (CBUAE) points to tightening credit standards for SMEs and individuals. This changing trend is attributable to the risk management perspective because of which banks prefer secured lending to unsecured lending options.
