Dubai mortgage and credit
News Article Date: Wednesday 15th of April 2009
DUBAI (Reuters) - The United Arab Emirate's first credit bureau said on Tuesday it aimed to collect bank data on 60-70 percent of the banking population by end-2009 as lenders realise the urgency of having access to customer credit ratings.
Seven banks in the UAE, including Noor Islamic Bank, Dubai Bank and mortgage lender Amlak AMLK.DU, currently share credit information about their clients with Emcredit, the bureau's chief business officer Zaid Kamhawi said.
That has given Emcredit access to credit information for about 20 percent of the Gulf oil exporter's about 2.5 million-strong banking population.
Emcredit expects six of the UAE's biggest banks, including possibly Emirates NBD ENBD.DU, to agree to share customer details by the end of the year as banks look for ways to better manage risk during a global crisis that brought to an end a regional economic boom.
"We have a burning issue and usually banks respond to burning issues," Kamhawi told the Reuters Islamic Banking and Finance Summit in Dubai.
"There is now a real need for banks to better assess their existing portfolio, and to put in place a strategy to extend credit further."
Banks in the UAE have suffered as a result of the global financial crisis that brought to an end a regional economic boom and triggered a slump in Dubai's real estate sector, which could potentially lead to scores of more home loan defaults.
"Defaults are on the rise compared to six or seven months ago. Recovery or collection efforts have been on the top of the agenda of a number of banks now," Kamhawi said. "There has been an expected deterioration of the loan books of banks."