Inspirational scheme to help people reach financial goals
Help is at hand for Emiratis who are struggling with debt thanks to a free financial literacy programme.
Yesterday, more than 50 participants joined an online graduation ceremony for the first community-run course, called Ghaya, which means “inspirational goal” in Arabic.
Two thirds of them were referred by the Social Support Authority, the safety net programme developed by the Abu Dhabi government for Emiratis who are unemployed, in debt, and need help from the state.
Fifteen signed up independently.
Salama Al Ameemi, director general of Maan, Abu Dhabi’s Authority for Social Contribution, said the classes were a lifeline for people who had fallen into financial trouble.
“There are women who are, for example, living in remote areas, and they don’t have a job yet, or there is a woman who used to be married and she was divorced and now she wants to know how to handle their finances,” Ms Al Ameemi said.
“Even people with a lot of money can get into bad debt, to the point that they need such a programme.”
According to a 2019 financial literacy survey by Visa, 43 per cent of people in the UAE aged between 16 and 24 said they were not ready to manage their own money.
More than half – 53 per cent – said schools did not prepare them well enough to take care of their own finances.
The average UAE resident was Dh42,571 ($11,590) in debt, according a 2017 report by what was then the National Bank of Abu Dhabi.
In the past year, the coronavirus pandemic has brought financial troubles.
As in many countries, the pinch point for young Emiratis comes when they graduate and start their first job.
As soon as they have a salary, banks offer them credit cards and personal loans, and they start to build up debt.
By the time they marry they are struggling to service interest repayments.
Munther Saif, 34, signed up for the three-month Ghaya programme because he had issues with personal debt.
“I have learnt how to manage my loans and how to pay them off, and also what type of insurance policies I should have for my car and my home,” said the father of two, who was in debt before he married.
“I have seen many people who got a new job, and in the first year they bought a luxury car, and other unnecessary things.
So this needs to be thought about before one even goes to the workplace and starts getting a monthly salary.”
Ali Alkhoori, 29, said he signed up after hearing about the course from friends.
“There are a lot of Emiratis struggling with their finances. A lot of people get in debt for unnecessary lifestyle [items], like cars or buying a new home, or some are getting debts for travelling,” he said.
“They always want to go business or first class when they can’t afford it. But they go and get a loan from the banks and they do it.”
Unlike many of the other students, Mr Alkhoori did not have any debt problems, but he wanted to learn how to become financially independent.
“We learnt how to invest your money, how to buy the shares, how to sell, and how to get the profits by the end of the year,” he said.
The classes took place on Sunday evenings and lasted up to two hours. Tuition was online and students took part in lectures and group activities in the same way.
All of the teachers were volunteers, and the initiative was designed and financed by a partnership between the Abu Dhabi Global Market Academy and the London Institute of Banking and Finance.
The classes covered topics including how to save and live within your means and how to identify investment options.
Hajer Zarrouki is an assistant professor at Higher College of Technology in Abu Dhabi who tutored a group of students who were aged between 30 and 40.
“We taught them how to understand the difference between wants and needs, how to set financial goals, and how to accomplish these goals efficiently and in a short period of time,” she said.
“The way people spend money is not related to how much they have, because everything is relative.
“Spending more than you are receiving is a kind of behaviour, and you can change that,” Ms Zarrouki said.
The government has sought to improve financial responsibility in recent years.
About 1,607 Emiratis were exempted from paying debts worth a total of Dh869.8 million in November last year on the directives of President Sheikh Khalifa.
Twelve banks were part of the exemption scheme, which was put together by the UAE’s Citizens’ Debt Settlement Fund.
Over the past three years, the UAE has introduced several programmes to deal with the problem of rising personal debt.
Last year, the Central Bank of the UAE signed an agreement with the Emirates Foundation to start a financial literacy programme through the Esref Sah scheme.
The next Ghaya course is scheduled to start in a few months.
“The lessons directly helped me with my finances,” Mr Saif said.
“I feel relief, and confident I can achieve my goals for this year and the future.”
These lessons directly helped me. I feel relief, and confident that I can achieve my goals for this year and the future MUNTHER SAIF
Ghaya graduate