Millions more now qualify as UAE drops salary requirement for personal loans

Dubai: A major change in the UAE’s lending landscape is set to reshape who can access personal credit, giving banks full discretion over eligibility while keeping household risk in check through strict macro-prudential rules.

The UAE has removed the Dh5,000 minimum salary requirement that shaped personal-loan approvals for years. Banks confirmed they received instructions to drop the salary floor, a shift that opens the door for residents who were traditionally shut out of formal borrowing.

You’re now seeing a lending environment where banks set their own thresholds based on internal risk models instead of following a single national benchmark. This affects workers earning below Dh5,000, students, youth, and those without formal salary slips.

New flexibility for borrowers, banks

Monica Malik, Chief Economist at Abu Dhabi Commercial Bank, said: “Such a move would increase financial inclusion and place the onus on individual banks to make the lending decisions.”

The change moves the system away from a fixed salary rule and toward bank-driven risk assessment. You get wider access to formal credit, and lenders take a more central role in evaluating income consistency, repayment ability, and overall borrower behaviour.

She continued: “The continued limits on personal loans - such as on loan size, repayment caps etc. - will continue to limit leverage risks for households. The macro-prudential framework remains strong.”

This underlines how the regulatory guardrails stay intact. Banks may widen access, but they must operate within caps on loan size, tenure, and repayment burdens. The framework keeps household risk from creeping upward even as eligibility expands.

Repayments will increasingly run through the Wage Protection System. Once salaries move through WPS-linked accounts, installments can be deducted automatically. You get more predictable recoveries, and banks gain cleaner data on income trends.

Impact on low-income workers

A large share of UAE workers earn below Dh5,000. Many relied on informal lenders, cash advances, or unregulated credit. Removing the salary barrier pulls this entire segment into the supervised banking system and lets them build repayment records that qualify them later for auto loans, home finance, or larger credit lines.

To add weight to this shift, another senior banking analyst said:
“Greater visibility through the WPS gives lenders a far clearer read on income consistency, which strengthens underwriting rather than weakens it.” This reflects the sector view that the policy doesn’t loosen standards—it sharpens them by linking repayments directly to verified wage flows.

Officials described the move as part of a broader push to ensure every resident has access to essential, regulated financial services and avoids unlicensed credit channels.

Market shifts, emerging trends

Industry observers expect the change to spur new lending options tailored to low-income and entry-level workers. Micro-financing, emergency credit lines, WPS-backed overdrafts, and compliant BNPL products are likely to expand as banks experiment with lower-ticket, lower-risk offerings.

You could also see savings-linked starter credit designed to build financial habits among first-time borrowers. Product comparison becomes more important because terms, limits, and internal salary thresholds now vary across institutions.

Malik’s comments frame the policy’s intent: broaden access, strengthen inclusion, and keep consumer protection rules intact. You end up with a more flexible system that still protects households from excessive leverage while giving millions their first formal entry point into credit.