U.A.E. Plans to Ease Citizens' Debt Burden as Economy Slows - Bloomberg:
The United Arab Emirates started a program that aims to reduce the debt burden of its citizens as the oil-rich Gulf country grapples with an economic slowdown.
The program, launched by the central bank, targets loans that cost individuals more than 50 percent of their monthly salary, according to the state-run WAM news agency. Payments would be consolidated over a maximum period of four years and capped at half the person’s salary or 30 percent of their pension. The interest rate won’t exceed the three-month interbank rate.
Gulf Arab monarchies have frequently bailed out citizens by writing off debt, part of an unwritten social pact that offers generous benefits in return for political loyalty. Critics say such moves encourage irresponsible borrowing. The vast majority of the U.A.E. population is made up of expatriates.
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