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Credit conditions in the UAE remained robust throughout 2025 on the back of a historic surge in SME demand and a property sector that continues to outpace the broader market, according to the Central Bank of the UAE’s (CBUAE) 4Q 2025 Credit Sentiment Survey (pdf). While overall momentum showed slight signs of cooling in some segments, the structural appetite for investment-led credit remains at multi-year highs, according to the survey.
The most striking development in 4Q is the renaissance of SME credit. Demand from small- and medium-sized enterprises reached its highest level since 2014. This was followed by healthy demand from large firms and government-related entities.
Business loan demand also strengthened over the fourth quarter, posting a net balance of +24.8 percentage points. More than half of the financial institutions surveyed (52.4%) reported an increase in demand, driven primarily by favorable macroeconomic conditions, a conducive investment environment, and increased working capital needs. The Northern Emirates saw the strongest demand for business loans, followed by Abu Dhabi and Dubai.
Sector-wide growth: Loan demand rose across all economic sectors, with property development recording the largest increase, followed by construction and the transport, storage, and communications sector.
Personal loan demand continued to grow, albeit with slightly less momentum than in 3Q, supported by rising household incomes, optimism regarding the broader economy, and a lower interest rate environment following cuts to the CBUAE base rate to 3.65% from 4.4% during the quarter.
Once again, it’s all about property: Housing-investment loans reached their highest level on record. Other housing categories — such as owner-occupier loans, refinancing, and renovations — also remained strong, tracking near record highs, according to the report.
Looking ahead: Financial institutions enter the new year with a positive outlook, expecting credit demand to strengthen further. Anticipated business loan demand is set to rise to a net balance of +33.8 percentage points. Personal loan demand is also expected to accelerate significantly to a net balance of +31.3 percentage points, led by owner-occupier housing loans, credit cards, and personal (other) loans.
