Central Bank of the UAE reveals new short-term credit rules.
Recognizing the evolving global landscape in consumer financial behaviors, particularly the rising popularity of “buy-now, pay-later” and akin credit services, the Central Bank of the UAE has unveiled amendments to the Finance Companies Regulation.
These new regulations aim to address and regulate the provision of such credit products and services within the country.
Adapting to Consumer Demand
The announcement acknowledges the growing demand for innovative credit solutions like “buy-now, pay-later” options.
With consumer preferences shifting towards flexible payment structures, the Central Bank’s amended regulations aim to ensure the responsible and regulated operation of these financial services in the UAE market.
Framework for Short-Term Credit
Under the newly introduced framework, entities looking to provide short-term credit, including “buy-now, pay-later” arrangements, must operate as agents of licensed banks or finance companies.
Additionally, they are required to obtain prior approval from the Central Bank before commencing operations in this domain.
The Central Bank’s initiative seeks to strike a balance between meeting consumer preferences for modern credit solutions and maintaining regulatory oversight.
This move aligns with the UAE’s commitment to fostering a robust and well-regulated financial ecosystem that caters to evolving consumer needs while ensuring financial stability and consumer protection.
By introducing these amendments, the UAE demonstrates its proactive approach in adapting regulatory frameworks to accommodate innovative financial products and services, fostering a dynamic financial sector that serves the interests of both consumers and the broader economy.