The latest report from the Central Bank of the UAE reveals a noticeable cooling in the demand for personal loans during the first quarter of 2026. Across the nation, the net balance for loan requests dipped to -6.0 percentage points, with the Northern Emirates experiencing the most significant drop. This downturn has spanned all lending categories, with credit cards and housing loans seeing the sharpest declines. Industry analysts attribute this trend to a combination of sluggish economic growth, a tightening labor market, and regional geopolitical tensions that have encouraged households to adopt a more conservative approach to spending.

Looking toward the coming months, financial institutions expect this trend to persist, forecasting a further decline in demand to -10.9 percentage points. While lower interest rates have provided a minor cushion, they have not been enough to offset the broader impact of soft consumer sentiment and reduced risk appetite. Meanwhile, credit standards have remained relatively steady, with rejection rates showing only marginal shifts. Despite a slight increase in rejections for car loans, the overall banking landscape remains cautious, signaling a clear shift away from the rapid credit expansion that characterized the UAE market in recent years.