Around 85 percent of United Arab Emirates (UAE) residents are in debt with an average individual debt of Dh500,000 ($136,128), a report said.

In terms of total debt by nationality in the UAE, residents from India and Philippines rank the highest followed by Pakistan and South Africa, the International Swiss Debt Management (ISDM) Consultancy, a Dubai-based credit counseling and debt management company, said.

About 75 per cent of the debtors are men and 25 per cent women.

Having launched in the region early this year, ISDM, the first debt management consultancy, works with a number of regional banks to help individuals and small businesses reduce their debt burden. It services more than 3,000 clients currently.

Yohannes Mazeingia, managing director, ISDM, said: “The lack of stringent credit rating policies and the culture of consumerism has lead to huge bad debts in the emirate. A recent client survey revealed that the average individual debt is around Dh500,000 in United Arab Emirates (UAE). This is a serious issue that needs to be addressed before it goes out of hand.”

The services on offer include solutions to individuals and small businesses – restructuring, negotiation, settlement and consolidation. With the restructuring and negotiation solution, ISDM negotiates with the bank for a reasonable payment solution within the individual’s budget. In the settlement solution, ISDM works for a final settlement amount agreeable to both the individual and bank. And finally, in the consolidation solution, ISDM works with the banks to consolidate a customer’s liabilities into one payment with a lower monthly installment and an extended loan term. In doing this, the individual is provided with an option of reducing the high interest rates on credit cards and moving to lower bank loans.

A detailed analysis is conducted at a nominal fee of Dh350, where an individual’s financial liabilities are explored in detail. “We have recently launched a comprehensive package – The ISDM Debt Management Kit – which offers a complete solution to both individuals and small businesses,” added Mazeingia. “We understand the situation of debtors and work towards acquiring a win-win situation for both parties. We are currently proactive in UAE, but do get distress calls from people in India, Pakistan, Europe, and the Philippines.” –TradeArabia News Service