The UAE Central Bank's latest data reveals that this credit expansion has been driven primarily by the business and industrial sectors, which have shown resilience and steady growth despite global economic uncertainties. The cumulative credit balance for these sectors reached AED757.4 billion by the end of March 2024. This represents a significant rise from the AED741.8 billion recorded at the end of December 2023.
A closer look at the distribution of these credit facilities shows that national banks are the primary providers, accounting for approximately 90% of the total credit, with the remaining 10% coming from foreign banks operating within the UAE. Conventional banks facilitated around 82.5% of the total funding, while Islamic banks contributed approximately 17.5%.
The credit extended by national banks was particularly strong in Abu Dhabi and Dubai, with the former contributing AED374.1 billion and the latter AED363.3 billion to the total credit balance. Banks in other emirates provided an additional AED104.3 billion.
Small and medium-sized enterprises (SMEs) also benefited from this credit expansion, receiving AED81.7 billion in loans during the first quarter of 2024. These loans accounted for 9.7% of the total credit extended to the trade and industrial sectors. SMEs continue to play a crucial role in the UAE’s economy, representing over 95% of the total number of companies and employing about 86% of the private sector workforce.
This growth in credit facilities is a clear indication of the UAE's ongoing economic recovery and the confidence that financial institutions have in the resilience of the private sector. The Central Bank's data underscores the critical role that national banks play in supporting economic development through the provision of necessary financial resources to businesses and industries.
As the year progresses, the UAE banking sector is expected to continue its supportive role, helping to sustain the momentum of economic growth and diversification in the country.