Coronavirus in UAE: Abu Dhabi announces three-month relief on EMIs
Benefits include deferment of installments for loans, refund of credit card processing fees, and zero service fees on utility bill payments.
Three-month relaxation on equated monthly installments (EMIs) of existing and new loans, reduced interest charges, offers on down payments, service charges and school tuition plans, lowered minimum balance requirements are some of the Covid-19 relief measures announced by the Abu Dhabi Government for businesses and general public.
His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces on Wednesday, March 25, ordered a 10-point comprehensive package for individuals and seven initiatives for small and medium sized enterprises (SMEs) through Abu Dhabi-based banks.
With further closures and restrictions from March 25, First Abu Dhabi Bank, Abu Dhabi Islamic Bank and Abu Dhabi Commercial Bank in coordination with the Abu Dhabi Department of Finance and Department of Economic Development Abu Dhabi will provide the much-needed cushion to support the community and businesses. The offers have been categorised into different sections ‘impacted by the Covid-19’ pandemic and ‘all’.
A timely relief
Rajeev Kumar, a sales executive with a private company, said the relaxation on new loans is very tempting, especially with the Indian rupee hitting new lows against dirham.
“Deferred EMIs for three months is a key drawer. Interest-free instalment for school tuition is also a good one. This is a timely order from His Highness,” Kumar said.
Dr SD Gopakumar, general manager, Al Jaraf Fisheries, praised the initiatives but hoped such measures are extended to businesses for existing loans also.
“This seems to be a very comprehensive package for all the SMEs. However, ideally the benefits should also be provided to the existing loans not just new borrowings.”
Dony Cyril, exhibitions director, DOME, said with all events cancelled and postponed, such measures will help overcome future hurdles.
“We have initiated a complete lockdown from Sunday but would like to fulfill the commitments to our employees and customers. It’s a big challenge for us and without the support of financial institutions, we can’t overcome this huddle. These initiatives are a good relief. I look forward to employee welfare schemes to ensure everyone’s happiness.”
Financial experts said such measures will aid individuals and boost business sentiments.
Adeeb Ahamed, managing director, LuLu Financial Holdings, said that the move will lessen the impending economic hardships of both individual and enterprise level customers. “Deferring installments on existing borrowings by three months will definitely help companies avoid a cash crunch in the short-term. This will lower stress on the working capital and allow companies to pass on the benefit to employees, thus freeing up vital cash and enabling some sense of liquidity in the market.”
He added the move will give several businesses a much-needed buffer period.
“Many businesses are hoping to rebound fully in three months’ time. But the ongoing situation has an element of uncertainty to it, and no one can predict yet how things will swing from here. So, these measures will at least give businesses in Abu Dhabi a fair starting point to re-assess their goals for a post-emergency situation.”
Renuka Gunjahalli, founder, Jupiter Business Mentors, said companies should start tweaking their business model.
“As per one of our surveys, one in five business owners believe climate change and natural disasters pose a threat to their business, but sadly 77 per cent of them do not have a natural disaster plan in place. The ripple effect of this could mean that as many as 40 per cent of small businesses will never reopen their doors following major natural disasters such as these. But with the help of these government backed measures, businesses can stay afloat during such crisis and get back on track after this pandemic,” she said.
Relief that covers all sectors.