DUBAI // The Debts Settlement Fund has approved a budget of Dh1.49 billion to settle personal loans of nationals who have defaulted.
The new scheme is expected to benefit 1,348 citizens who have applied to the fund for aid.
The decision was made at a meeting for the fund’s higher committee, following the directives of the President, Sheikh Khalifa, said the state news agency Wam.
“Sheikh Khalifa has given directives to provide all the necessary elements which guarantees for the citizens decent lives and help in eliminating any obstacles that affect their stability,” Wam said.
A report prepared by the fund’s technical committee said the total amount owed was Dh1.49bn. It also said that those applying have met all the required criteria of the fund. However, there were no details provided about the criteria.
Six banks gave information to the fund suggesting loan payments be rescheduled so that monthly payments will not exceed 50 per cent of the borrowers’ salaries. The banks also agreed to cut the interests on the loans by 1 per cent.
The committee lauded the banks for their adherence to a high degree of social responsibility and said that their initiative will boost the partnership between them and the fund.
There was no time-frame given for the settlement of debts.
Ashouga Bkheit, a 35-year-old accountant, said the initiative lifts a heavy load off Emiratis, especially young ones.
“There are many young people who are unaware of the consequences of loans, once they fell into the trap they couldn’t move on,” she said. “So if they can’t start their own businesses because of their loans they can’t live a good status because of the loans. Sometimes the loans are for serious necessities like for marriage or for a car.”
She said people who took loans for a serious cause should be given priority.
“They should also look at those who have been paying loans for a number of years and finish it off for them, because those people had responsibility and were serious about paying back their debts.”
Fatima M, a 27-year-old graphic designer also hailed the move as a “relief for people from their debts”. However, she said it could backfire because people might take for granted that their loans will always be paid off by the Government.
“I suggest the fund only pays the interest, and leaves the principle for the debtors to pay,” she said.
Earlier, the loans of an additional 184 Emiratis were forgiven by Abu Dhabi Commercial Bank through a private initiative designed for those with debts of less than Dh50,000 The total debt for that group was Dh20m.