Gulf banks put brakes on lending as dollar liquidity crunch looms - Reuters

Gulf banks put brakes on lending as dollar liquidity crunch looms - Reuters:

Gulf banks are limiting their lending to minimize potential losses from the coronavirus crisis and an expected squeeze in dollar liquidity in the oil reliant region, some bankers say.

Like banks around the world, Gulf lenders face an expected drop in loan growth in crisis-affected industries such as retail, tourism and transport, but they must also navigate the impact of plunging crude prices on the region.

Restricting lending is expected to hit small businesses most vulnerable to lower demand and supply chain disruptions hardest.

“Right now what’s happening is that banks are afraid to give loans to SMEs (small and medium sized enterprises), so I don’t know how SMEs will recover from this because they won’t have financial backup,” a banker from the United Arab Emirates said.