UAE to settle citizens' defaulted loans, up to $1.4 million

UAE to settle citizens’ defaulted loans, up to $1.4 million

The United Arab Emirates will settle up to 5 million dirhams ($1.36 million) of defaulted loans for each indebted Emirati, state news agency WAM said on Sunday, in the second such move by the government this year

May 21, 2012 8:52 by Reuters

The order from UAE president, Sheikh Khalifa al-Nahayan, will include people in jail, pending trial or convicted over their outstanding debt. Citizens who agreed installment payments with the courts will also see their debt paid, though they will have to arrange a new payment schedule with the government.

“More than 350 UAE national will benefit from the aid,” a government official said, noting that the debt will be paid by the citizens at a later stage according to a special formula based on each case.

In January, Sheikh Khalifa made a similar order covering non-performing loans of citizens, whose debt did not exceed 1 million dirhams, totalling 2 billion dirhams. A total of 6,830 citizens of the Gulf state will benefit from the decision.

The UAE has escaped the upheaval that has shaken the Arab world, but the case of five activists convicted late last year for insulting the country’s rulers suggests the oil-producing state is not immune to calls for reform.

But Emirati activists have been calling on the Internet for a greater say in government, legislative powers for the 40-member Federal National Council (FNC) and less censorship.

The UAE is among the world’s top five oil exporters and its small local population has one of the world’s highest per capita income, estimated at $66,625 in 2011, according to the IMF.

The UAE government is spending billions of dollars to improve living conditions. It pledged last year $1.6 billion to improve the utilities infrastructure in the country’s less developed northern emirates.

($1 = 3.6730 UAE dirhams)

(Reporting By Mirna Sleiman; Editing by Amran Abocar and Elaine Hardcastle)