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Dubai Banks Brace for Bad Debt as Borrowers Flee the Country

  • Rising number of small business owners are abandoning debts
  • Slowing economy and lack of bankruptcy law prompting 'skips'
Bloomberg business news

Why Are Dubai Borrowers Fleeing the Country?

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Dubai’s slowing economy, the rout in commodities and strict debt repayment laws are reviving a phenomenon that symbolized the emirate’s crash in 2009: “skips,” or business owners who quietly leave the country to avoid punishment for defaulting on loans.

A rising number of smaller and medium-sized company owners are abandoning the United Arab Emirates without repaying debt, according to Emirates NBD PJSC, the country’s second-largest bank. People in the SME sector may have left behind 5 billion dirhams ($1.36 billion) of loans this year, Abdul Aziz Al Ghurair, Chief Executive Officer of Mashreqbank PSC and chairman of the U.A.E. Banks Federation, said in Dubai on Monday.