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Abu Dhabi: The downtrend in the credit card business in the US as a result of the credit crisis has been offset elsewhere in the world, especially in the Middle East, a senior executive said yesterday.
Record oil prices and the subsequent abundance of liquidity have pushed consumer spending to new highs in the region, compared to the diminishing disposable incomes in the United States.
"There is a strong potential for growth of the credit card business in the region. In Saudi Arabia, for instance, credit cards only constitute five per cent of consumer debt, leaving substantial room for growth," Denzel Lawson, general manager of MasterCard Worldwide, told Gulf News.
"In Egypt, only 10 per cent of the 70 million population are banked, and of that only three to four million have credit cards, which illustrates the potentials of growth there."
While the UAE remains one of the most attractive markets, the immaturity of the credit business is affecting business.
"The UAE stands as one of our most important markets in the region, not only because of the population and income growth, but because of the remarkable flow of tourists as well, who tend to use credit cards in their travel," Lawson said.
Nevertheless, the credit market in the UAE is still far from mature due to the absence of a credit bureau, according to Lawson.
"In other countries such as Saudi Arabia and Kuwait as well as Egypt we find well established credit bureaus, but developments in the UAE are taking the market towards more maturity, given the recent decision to deposit all payrolls in banks for instance, which increases the client base," he said.
"The lack of a credit bureau here is compensated for through the prudence of banks in lending, while any business always allows a margin for write-offs," Lawson added.
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