The UAE Central Bank has abolished the previous rule requiring a fixed minimum salary for personal loan eligibility, allowing borrowers greater access to financing regardless of their monthly income level.
UAE Central Bank ends minimum salary condition for obtaining personal loans
The Central Bank of the United Arab Emirates has issued new instructions to all licensed banks and finance companies, directing them to eliminate the long-established requirement that customers must earn a minimum monthly salary—traditionally about Dh5,000 at most institutions—before being considered for personal loans or other forms of individual financing. According to a report published by Emarat Al Youm, this decision marks a significant change in how banks assess eligibility for consumer credit across the country.
For many years, minimum salary thresholds served as a basic screening tool used by lenders to determine whether applicants met what they viewed as a responsible or secure financial profile. Although these benchmarks varied slightly from one organization to another, the general expectation across the sector remained more or less consistent. By removing this predefined income floor, the Central Bank aims to create a more flexible and inclusive lending environment—one that reflects the diverse financial realities of residents living and working in the UAE.
Under the revised framework, banks are no longer bound by a single nationwide minimum salary figure. Instead, each institution is encouraged to develop its own internal practices and criteria for evaluating the earning capacity and repayment ability of borrowers. These internal guidelines may take into account an applicant’s income stability, employment history, spending obligations, credit score, and overall financial behavior. In essence, lenders are being given greater room to tailor their decisions based on a more holistic assessment rather than depending on a rigid number that may not accurately represent a person’s true financial capability.
One of the primary motivations behind the Central Bank’s directive is to increase financial inclusion across the country, particularly for individuals who earn modest wages but maintain stable employment and good financial habits. Many low- to middle-income workers have historically struggled to access personal financing, even when they demonstrated reliable repayment patterns or responsibly managed their existing obligations. This revision opens the door for such individuals to qualify for a wider range of services, including short-term liquidity solutions, emergency cash loans, and other “cash-on-demand” products that can help them navigate unforeseen expenses.
Furthermore, the move is expected to encourage greater competition among banks, prompting them to develop more innovative financing products that cater to different income groups. With the freedom to set their own eligibility criteria, institutions may adopt more dynamic and customer-centric approaches, such as personalized credit assessments or tiered products tailored to varying levels of financial stability. This environment could ultimately lead to better service quality, more attractive offers, and improved transparency in loan terms.
Overall, the Central Bank’s decision reflects a broader commitment to modernizing the UAE’s financial landscape. By shifting away from a one-size-fits-all approach and empowering banks to craft their own responsible lending policies, the country aims to support a more inclusive, adaptable, and consumer-friendly financial ecosystem—one that gives a larger portion of the population access to essential credit and financial opportunities.
Central Bank representatives, in comments shared with Emarat Al Youm, revealed that the UAE is preparing to introduce a more inclusive banking framework that will allow every resident—regardless of age group, profession, or income level—to gain access to the formal financial system. This upcoming phase is expected to particularly benefit groups that traditionally faced barriers when attempting to open bank accounts, such as young adults just entering the workforce, employees with lower income brackets, and individuals working in physically demanding or labor-oriented industries.
According to the officials, the aim of this initiative is to ensure that any resident who receives a salary in the country will have the opportunity to maintain a personal bank account that fits within the national standards of transparency and security. This aligns with broader efforts to push the UAE toward a more advanced, digitally driven financial landscape that serves all segments of its population.
A central feature of the new approach is that these accounts will be tied to the Wage Protection System (WPS), the regulatory mechanism overseen by the Central Bank that monitors salary payments across companies registered in the UAE. The WPS was created to safeguard workers’ rights, ensure timely salary transfers, and maintain accurate wage records. By attaching personal bank accounts to this system, financial institutions will be able to seamlessly track incoming payments and apply loan repayments without delay.
Once the policy takes effect, banks will be authorized to automatically deduct the agreed-upon loan installment from the customer’s salary immediately after it is deposited each month. This process is expected to benefit both borrowers and lenders. Customers will no longer need to worry about missing payment deadlines or manually transferring funds, reducing the risk of late fees or unintentional defaults. At the same time, banks gain a more reliable repayment mechanism, which can encourage them to offer financing products to residents who previously may have been considered higher-risk simply because of their income category or employment type.
The Central Bank believes that giving workers of all backgrounds easier access to banking services will encourage more responsible financial behavior and help individuals build stronger credit profiles. For many low-wage and labor-sector employees, a bank account may represent their first formal interaction with the financial system, eventually leading to greater financial literacy and improved opportunities for credit, savings, and investment.
Additionally, this move is expected to support the UAE’s long-term goal of transitioning to a cash-lite economy. Encouraging more residents to participate in digital banking helps reduce reliance on cash transactions, enhances security, and supports the country’s ongoing technological advancements in the financial sector.
By establishing a system where wages are efficiently monitored and loan deductions are automatically executed, the Central Bank aims to create an environment of mutual trust between workers and financial institutions. The expanded accessibility of banking services, combined with automated salary-linked repayment mechanisms, represents a significant step toward making financial inclusion a reality for millions of residents across the UAE.
