Easy bank loans that lure people into the debt trap have created a major social problem, according to leading officials. Sheikh Rashid bin Humaid Al Qasimi, Deputy Director of the Ras Al Khaimah Court, said many people spend beyond their means and then obtain loans to maintain their lifestyle. Keeping up with the Joneses, with the help of the banks, is ruining UAE society, he declared. Blaming banks for encouraging people to obtain loans, Sheikh Rashid said, "The UAE has a large number of banks which always come up with new ideas to persuade more and more people to apply for loans."

Public welfare associations have not sounded the alarm over the trap set by banks. The financial condition of many people has gone from bad to worse as they chase material pleasures. Sheikh Rashid said the only way to rescue the situation is to return to the Muslim code of conduct which forbids transactions involving interest. Every individual should be satisfied with whatever he has been given by God.

Lt Col Abdullah Khamis Al Hadidi, head of the police Investigation Unit, said people have always been materialistic. But most have no concept of financial planning, so they ultimately pay a high price to enjoy the easy life. The younger generation always wants the best and the latest, and this is what sends them to the banks, he said. As their debts mount, their dreams fade.

He spoke about several families here whose breadwinners are languishing in jail for failure to repay loans. In their struggle for survival, the children of these families do anything to eke out a living. More often than not, they end up in jail themselves.

He said if the situation continues, the courts will see a dramatic increase in the number of cases.
Zeyad Al Gamal, head of the Finance Section at the Commercial International Bank, said people are falling victim to the debt trap because of a lack of financial awareness. Competition among banks is also aggravating the problem. Each bank vies to float a better offer and people get caught in the crossfire. Many people have abandoned their homes because they have not been able to repay loans, he said.