Dubai: Consumers in the UAE pocketed a total of Dh1.3 trillion ($355 billion) in personal loans in just one year, between March 2014 and March 2015, according to data compiled by the National Bank of Abu Dhabi.
The amount was up 6.5 per cent compared to a year earlier, indicating that personal borrowing has picked up. There is no statistical evidence to show how the money was spent, whether borrowers used it to deal with an unexpected emergency, to make ends meet, or simply to maintain a luxurious lifestyle.
However, whatever the reason behind the rising debt, there is a strong likelihood that a huge part of that mount has been kept hidden from friends and families of borrowers.
According to a new research, a growing number of people are not only borrowing money, they are keeping their debt troubles a secret.
Comparison site MoneySuperMarket recently polled more than 2,000 adults in the UK and found that nearly half (41 per cent) of borrowers are hiding their money problems out of shame or guilt.
About a third of those who are in debt have kept mum or lied about their bank balances or how much they actually owe, with 33 per cent of cash-strapped respondents admitting that they masked the amount of money they borrowed.
Preeti Harrison Bhambri, founder of UAE-based personal finance site MoneyCamel.com, said the findings are not surprising, citing that both husbands and wives tend to hide their debt “on account of wasteful or unnecessary expenses.”
“Almost everyone hides their debts from their friends just to pretend to live up to a certain lifestyle. This actually fuels financial trouble,” Bhambri told Gulf News.
In the survey, more women (37 per cent) than men (29 per cent) were found guilty of “bending the truth” about their financial troubles. Overall, people in debt are most likely to keep it a secret from their family (23 per cent), followed by friends (18 per cent) and partners (15 per cent).
“Debt can be a significant burden and can cause considerable stress for not only you but also those around you. However, it is worrying that so many people with debts are masking the real truth from the people closest to them. This could cause further damage to relationships , if and when the truth comes out,” said Kevin Mountford, head of banking at MoneySuperMarket.
MoneySupermarket’s study found that the main reason people hide debts is down to feeling guilty or ashamed, with 41 per cent stating this, followed by feeling stressed (21 per cent). About one in ten lied because they feel their partner or spouse, friends or family would be angry or would not approve.
A significant number of those in debt also do not intend to come clean to their loved ones anytime soon. More than half (53 per cent) of those who have lied to their family will not reveal the truth soon, while 41 per cent do not plan to tell their friends and 23 per cent do not plan to tell their family.
One of the biggest sources of absenteeism from the workplace is stress, of which financial stress plays a significant part. Keeping debt hidden can lead to a number of unfortunate consequences not least the breach of trust with loved ones. Whilst it may be great in the short-term keeping up with the Jones’ or Ahmeds’ of the world, getting in debt to achieve this is never a smart move.
Andrew Prince, financial planner at DeVere Acuma, said the social stigma attached to debt often makes borrowers hesitate to open up to their loved ones.
"There is indeed a social stigma attached to debt which often results in borrowers leaving it too late to seek assistance either from family or the bank which lent the money. This places an increasing strain on personal and working relationships and ultimately could lead to incarceration if debts are not repaid," he said.
"Following on from recent other articles on the subject, there is likely to be an increasing number borrowing to fund necessities including school fees and not just the flash car in the driveway."
