UAE bounces back from recession with double-digit credit cards growth
Webteam: 18th August 2014 10:43am
A vibrant economic environment contributed to a 21 percent increase in consumer credit outstandings in the United Arab Emirates in 2013.
Improved customer confidence, growth in borrowing capacity and more relaxed consumer credit policies also contributed to the significant increase in consumer credit.
The country's credit cards market emerged from a recessionary period to experience double-digit growth in billed volume and outstandings in 2013, indicating an appetite for expansion among credit card issuers.
Billed volume per credit card has been growing in the UAE as a result of the growing proportion of Premium customers in the credit card base. Although Premium card customers comprise between 25 to 30 percent of the total customer base, their spending constitutes around 70 percent of total credit card billed volume in the UAE
"Customers across all the different segments grew their credit cards billed volume. However, the increase in credit cards billed volume across the affluent segment was most marked. As a result credit loss rates continued to edge down during 2013, primarily due to the growing proportion of Premium card spend. Such a trend will be acceptable to issuers, if managed correctly, as they attempt to grow credit card receivables and improve yields on their card portfolio" said Phathisani Khumalo, deputy head of research at Lafferty.
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