Picture for illustrative purposes only. ARCHIVE

The UAE Central Bank has reportedly instructed banks to remove the Dh5,000 minimum salary requirement previously required for personal loan applications — a move expected to widen access to financing for thousands of low-income workers. According to Arabic daily Emarat Al Youm, banks may now determine their own minimum salary thresholds based on internal risk criteria. Central Bank officials said the decision aims to boost financial inclusion, particularly for youth, labour-sector workers, and those earning below Dh5,000. The policy shift will also allow more workers to open Wage Protection System (WPS)–linked accounts, enabling monthly installments to be automatically deducted upon salary transfer. Industry analysts say the change marks a major shift for lower-income borrowers who were previously excluded from formal credit. It also reduces reliance on unregulated lenders while giving banks clearer insight into borrowers’ repayment capacity through WPS data. Despite the eased entry requirements, consumer protections remain. Loan amounts are still capped at 20 times the borrower’s monthly salary, repayment terms at 48 months, and installments cannot exceed 50 percent of income. Analysts expect the directive to spur new products targeting entry-level workers, including micro-loans, emergency credit, WPS-backed overdrafts, and compliant buy-now-pay-later options. Banks are not required to suspend installments if a borrower becomes unemployed, meaning restructuring agreements remain essential to avoid default. ICA/Expat Media
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