Demand for commercial loans and personal counterparts saw a moderate increase during the third quarter of this year, as the criteria for granting loans to both types continued to tighten, the survey showed. The survey was optimistic that demand would increase during the fourth quarter of 2019, but stressed further tightening of credit criteria.

The credit confidence survey is a quarterly questionnaire that shows trends in demand for commercial and personal loans, and the appetite for borrowing among individual and corporate borrowers, based on the views of senior credit officers of all banks and financial companies operating in the country, as well as criteria for granting finance.

In detail, the survey showed that for SME lending, demand witnessed an increase during the third quarter in Abu Dhabi and Dubai, in contrast to Sharjah, Ajman, Ras Al Khaimah and Umm Al Quwain, where demand declined, pointing out that 76% of respondents said that the third quarter did not witness A change in credit criteria, expecting optimism in the current quarter on appetite for borrowing and an increase in demand, but with more stringent criteria for funding approvals.

According to the Central Bank's survey, retail financing increased slightly in the third quarter, mostly from Sharjah, Ajman, Ras Al Khaimah, Umm Al Quwain and Dubai, while the situation remained unchanged in Abu Dhabi, noting that respondents attributed the change in loan demand to its association. Expectations of change in income and housing market, in addition to seasonal effects. He pointed out that more than 88% of respondents said that the criteria for granting personal loans did not change in the third quarter.

He pointed out that the expectations of respondents in the survey for the fourth quarter of this year indicate that there is another increase in the demand for personal loans in all categories, with the exception of auto finance, stressing that all participants agreed on a trend to further tighten credit standards for personal loans also during the last quarter.

The results of the survey indicated that the most important factors affecting the determination of credit standards are the economic outlook and conditions in the sectors or companies, and improved sales, in addition to the quality of the bank's asset portfolio.

• Expected further increase in demand for personal loans during the last quarter of 2019.