The amount the Government has spent settling the loans of citizens has increased.
Beware the pitfalls of borrowing, Sheikh Mansour advises young Emiratis
DUBAI // Young Emiratis have been urged to be ultra cautious when taking out loans, as it was revealed the Government spent Dh2.5 billion last year settling personal debts.
“My advice to the young generation is – do not take loans unless you are in dire need,” said Sheikh Mansour bin Zayed, Deputy Prime Minister and Minister of Presidential Affairs.
Sheikh Mansour said the Government had settled the loans of 2,000 UAE nationals last year at a cost of Dh2.5bn, up from Dh1.3bn owed by 1,500 people in 2012.
“Take a loan to establish your own business only if you are aware of the risks,” he said.
“Citizens should be aware of all aspects. The media has an important role to raise awareness about risks, and give financial guidance.
“There is a lack of awareness among users. We know banks have duties and responsibilities.”
He said some banks allowed UAE nationals to borrow more than their credit limit. “We have weaknesses in some laws and are working on improving them.”
The Debts Settlement Fund, with an initial budget of Dh10bn, was created under a directive by the President, Sheikh Khalifa, to mark the 40th National Day on December 2, 2011.
It works with signatory banks, who waive 50 per cent of debtors’ loans. The rest is settled by the fund, which is reimbursed by deducting payments from the debtor’s salary. Beneficiaries must also sign a declaration promising not to take out further loans until their debt is paid off.
Sheikh Mansour was speaking on the second day of the Government Summit in Dubai.
Turning to the regional political situation, he said the UAE had been untouched by the turmoil of the Arab Spring because of the “strong bonds” between the leadership and its citizens.
“The UAE people are always supportive of the UAE leadership. The leaders are very close to the people, without protocol. Our leadership reaches out to citizens. Leaders visit citizens and citizens visit leaders.”
Sheikh Mansour said he hoped that strife in parts of the Arab world would have a positive outcome.
“I am sorry that the situation in Arab countries has reached this state. I pray it will settle down and stabilise and hope we can grow closer to one another.
“Arabs are welcome in the UAE. We exchange experiences and want to take advantage of their ideas.”
Sheikh Mansour also spoke about plans to introduce compulsory military service and said a number of Emirati women had expressed their interest in joining the Armed Forces.
The Government announced last month it would introduce military service for all Emirati men between the ages of 18 and 30. It would be optional for women.
The President, Sheikh Khalifa, has ordered the Cabinet to draw up the bill for a national defence and reserve force.
“I met 70 university girls at the summit here. UAE girls want to be accepted before men. The draft law on the reserve military force is very important and young students have to join military service. We have kept it optional for girls,” Sheikh Mansour said.
“It is important for men to be respectful and learn discipline and the army will create values of serving the nation. Many mothers are very happy with the law.”
Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, also launched an online initiative at the session.
The Arabic website, www.ihtimam.ae, allows residents to propose new ideas and to help decision makers to come up with ideas and policies.