Business owners in Dubai are quietly leaving the country to avoid punishment for defaulting on loans.
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DUBAI: 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 UAE Banks Federation, said in Dubai Monday.Banks in the UAE had focused on boosting loans to SMEs as they could typically charge higher interest rates than lending to large corporations.Liquidity conditions in the UAE are expected to become tighter over the next few months, according to a quarterly credit sentiment survey from the central bank.Results at larger corporations and the banks are also holding up.
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