UAE’s Dhs100b stimulus package a huge step

The UAE has been taking robust containment and control measures to tackle Corona virus COVID-19 crisis, which has become humanity’s biggest challenge.

All precautionary steps are being taken in collaboration with competent bodies in the country and in line with the standards and guidelines of the World Health Organisation (WHO).

While tackling the social and health impact of the deadly virus, the economic pain endured by the society cannot be taken lightly.

This is where the Dhs100 billion comprehensive targeted economic support scheme for retail and corporate customers affected by COVID-19 launched by the Central Bank of the UAE, CBUAE, comes in as a timely and effective measure.

The Central Bank of the UAE has adopted a number of measures in an effort to support the economy and protect consumers and this will hugely help in boosting business confidence and sustain growth continuity.

Bank authorities have an important role to play. Banks are expected to retain sound lending standards and are required to treat all their customers fairly.

It should not be forgotten that the purpose of the targeted scheme is to facilitate provision of temporary relief from the payments of principal and interest on outstanding loans for all affected private sector companies and retail customers in the UAE.

Many retail and corporate customers have become exposed to the risk of temporary shortfall of their cash flows due the outbreak of Covid-19 pandemic, and the scheme will help address the current situation by providing both a relief to customers and a zero cost funding to banks.

The crucial Small- and medium-sized enterprises (SMEs) sector too has received right attention. The reduction by the CBUAE of the amount of capital banks have to hold for their loans to SMEs by 15 to 25 per cent will greatly facilitate further access of SMEs to financing.

The increase in the loan-to-value, LTV, ratios applicable to mortgage loans for first-time home buyers by 5 percentage points will certainly go a long way in contributing to the affordability of housing without unduly increasing inherent risks. First time buyers will benefit from being required to put up less of their own capital when making the first real estate purchase.

On another front, it is good that the National Emergency Crisis and Disaster Management Authority, NCEMA, has launched the Business Continuity Readiness Guidelines for UAE Organisations as part of efforts to boost the nation’s readiness and response for emergencies and transfer best international practices.

The purpose of this Guide is to demonstrate precautionary and preventive measures aiming to sustain business continuity for organisations across Preventive Measures; Preparing and Increasing of Readiness; and Response and Handling of Cases, while planning for business continuity during outbreaks features Leadership; Remote Work Strategy; Staff Distribution; Flexibility of Procedures; Monitoring and Evaluation of Suppliers; and Supply Chain Readiness.

Challenges are a part of life and this is no time for negativity. Preparing for any event is the responsibility of all organisations and levels (federal, local and also the private sector) and it is also the key to success in managing any emergency or crisis case.

At these challenging times individuals too should act responsibly. UAE citizens and residents should practise good hygiene by regularly washing their hands with soap and water. They should also avoid contact with people who show symptoms of respiratory infections.

The public should avoid circulating rumours shared through social media, and only follow official news sources.