Kochi: Accompanying a major proliferation of the sources of credit in the UAE, payment defaults and cases against defaulting Indians have also been on the rise.
While the main sources of loans continue to be banks that charge up to 8 per cent and credit cards that charge 30 per cent, increasing instances of Indian expatriates sourcing credit from private moneylenders who charge between 72-120 per cent are also getting reported, K V Shamsudheen, Chairman of Pravasi Bandhu Welfare Trust (Dubai), said.
The spending habits of expatriate Indians, that of their families back home and the increasing value of the Indian currency in the recent past are primarily to blame for this growing trend.
As the job markets have become tighter and more competitive, wages have been falling and spending habits of the families back in India have been increasing. The recent rise in the value of the Indian currency have also reduced the value of the rupee remittances sent back home, Shamsudheen said.
He cited the instance of an Indian who had sourced a loan of Dirhams 6,000 from a private lender in UAE and paid about Dh 3,600 as interest for 10 months. His liability had meanwhile grown to Dh 12,000 and further to Dh 22,000.
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The lender had taken his thumb impression on a blank sheet of paper and had obtained two signed local as well as two NRE cheques. The moneylender deposited the local cheques which bounced and it has become a police case now.
There are several middle class and lower middle class expatriates who walk around with six to eight credit cards and have no qualms in making purchases with them. In some cases the minimum payment to the credit cards are more than their monthly salary, Shamsudheen pointed out.
The largest single crime that has landed expatriate Indians in jails has been cheque-bounce.
