ABU DHABI // The President, Sheikh Khalifa, has ordered that thousands of Emiratis should have their debts cleared. Those in jail for owing money or detained pending a court ruling will be freed.
About Dh2 billion has been set aside for the initiative, which will affect 6,830 debtors.
They will have to take a 25 per cent salary cut and vow not to get back into debt until they have paid back the debt clearance sum.
The decree follows a recommendation by a higher committee charged with tackling the debts of low-income Emiratis.
The body is headed by Ahmed Al Zaabi, the Deputy Minister of Presidential Affairs.
The committee – made up of representatives from the Ruler’s Court, Abu Dhabi Department of Finance, the Central Bank and the Justice Department in Abu Dhabi – agreed on the recommendation after long discussions about the debt problem.
The fund, established on National Day, was set up after a decree from Sheikh Mansour, the Deputy Prime Minister and Minister of Presidential Affairs, on the President’s orders.
Khaled Mustafa, a lawyer in Abu Dhabi, said debt cases have long been a mainstay of the courts.
He believes people should not rely on the Government to help and called for future lending to be restricted to help to prevent people getting into unmanageable debt.
“Places that give out loans need to be regulated,” said Mr Mustafa. “They did previously, now it is easier to get a loan. This really needs to be controlled.”
M R, the sister of an Emirati who owes money, hopes he will be among those to have their debts paid off.
“It was from a bad business that my brother went in debt,” she said. “He is in debt for more than Dh500,000.”
Others with debts greater than the Dh1million limit hope to be included in the next round of assistance.
“I need the Government to help us, our debt is for Dh2.7m for the past 10 years,” said Sheema Waheedi, the wife of an Emirati in Abu Dhabi.
Her family’s debts are not from lavish spending, but from the failure of two businesses – one selling electronics in India 10 years ago, and a jewellery shop in Dubai five years ago.
“The expatriate business partner in both cases stole the money and went back to their country,” said Mrs Waheedi. “One robbed us and went to India, the other stole all the jewellery from the store, worth Dh500,000, and ran off to Pakistan.”
Of her husband’s Dh42,000 monthly salary, the family has less than Dh4,000 to spend every month.
“The rest goes on interest on three credit cards,” she said. “We want any help – even if the government just pays half or quarter of it, it would be helpful.”
Mrs Waheedi said the debt has left the family in “serious depression”.
“I see my husband only having too many problems,” she added.
Although the Government has given them land, their debt means they are unable to take out a government loan to build on it.
Another Emirati, who asked not to be named, said many of his compatriots had been applying through the presidential affairs website for an appointment at the Ruler’s court to present debt papers.
“My debt is more than Dh1m, so this will not help me,” he said. “But I went to the court and they said I am in the system to be provided with help.”