Loans extended to industrial companies and other businesses in the first two months of this year recorded a 1 per cent year-on-year rise to Dh7.4 billion as strengthening oil prices helped economic recovery, the UAE Central Bank data shows.
“The significant credit growth reflects an overall uptick in economic activities recorded across the industrial and business sectors in early 2018 in continuation of the upswing recorded in 2017,” the state-run news agency Wam said, citing statistics from the central bank.
The money lent to the industrial and business sectors until the end of February accounts for 68 per cent of total loans extended by the UAE banks to the private sector in the same period and comprises 51.5 per cent of total funding to all entities, including those from government and the public sector.
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The funds provided to the industrial and business sectors rose to around Dh2.8bn in January and Dh4.6bn in February, bringing the total amount of loans and advances to the two sectors to Dh755bn, the report said, without specifying the time period over which the cumulative funding has been extended.
The UAE has stepped up efforts in recent years to bolster industries such as aluminium and petrochemical products in its attempt to lessen reliance on revenues from hydrocarbons.
At the same time, companies are increasingly tapping the debt market amid signs of economic improvement on the back of the oil prices recovering from a three-year slump. Abdulaziz Al Ghurair, the head of the UAE Banks Federation, last month forecast loan growth of 5 per cent to 6 per cent on aggregate for lenders in the UAE this year compared to 4 per cent growth recorded in 2017.
