Angelina Cruz knows there is only one way out of her predicament, but she is not yet ready to go to the police.
The Filipina housemaid, 39, who asked for her name to be changed for the article, has amassed a Dh12,000 debt to two loan sharks and is barely managing to pay the 15 per cent interest charge each month, equivalent to an annual rate of 180 per cent.
“I have been paying already for nearly a year,” says the mother-of-three who has lived in the UAE for seven years. “I just need to do something, otherwise even if I work for 10 years I won’t be able to pay it off because it will keep going up.”
Her money troubles are shared by many in the UAE. The National has seen a spike in the number of letters asking for help since it started running a series of articles on escalating levels of personal debt in July.
According to the Al Etihad Credit Bureau, 3.15 million UAE residents (almost one in three) are living in debt, and almost all of them have more than one loan.
Now, in a three-part series starting today, we are sharing the stories of three of our readers to further highlight the growing issue of over indebtedness.
Ms Cruz’s money troubles started in 2013 when she left her employer, for whom she worked for four years. She secured another job, but left after two weeks as she did not like the family. It took her two months to find another employer, during which time her expenses piled up.
“I am a single mum. I am separated from my husband. So I don’t have anyone to help me financially because we were also renting a house in the Philippines at that time,” she says.
“I asked my friend if she knew someone I could borrow money from, because I can’t take a loan from the bank. I have only a Dh2,500 salary in my job [and] need at least Dh5,000 and then a salary certificate for three months and a bank account [ to get a loan from a bank].”
A friend arranged for her to borrow money from a gentleman Ms Cruz has never met, acting as an intermediary and guarantor for the loan.
She initially borrowed Dh2,000 and was making the Dh300 repayment each month, but after borrowing about Dh2,000 more she soon ran into trouble because of family problems and could not cover the increasing instalments. As a consequence, each time she missed an instalment it was added to the principal loan amount.
She now owes Dh7,000 to the original lender and Dh5,000 to her “friend”, the guarantor, for missed payments on the original loan – in total three times the amount she borrowed. And she has already been paying the loan back for a year.
“I don’t want to have a problem with them, for them to give me any trouble, especially with my employer. So sometimes I borrow from others so I can pay the interest,” she says.
Ms Cruz and her son, who together earn Dh4,700 a month, have to pay Dh1,800 a month just to cover the interest on the loans. And if they do not pay, the guarantor for the original loan withdraws the interest payment each month from the ATM card of Ms Cruz’s son.
“We are paying Dh1,300 for the bed space, and with the transportation and food we can’t really send money back home and I am feeling bad for my [two] children back home because they are suffering,” says Ms Cruz.
“Most of my friends tell me to report them to the police, but I know they have a family back home to support. I don’t know where to turn. I can’t sleep at night.”
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Company Profile
Name: Thndr
Started: 2019
Co-founders: Ahmad Hammouda and Seif Amr
Sector: FinTech
Headquarters: Egypt
UAE base: Hub71, Abu Dhabi
Current number of staff: More than 150
Funds raised: $22 million
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UAE currency: the story behind the money in your pockets
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UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
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The material was first discovered when Andre Geim and Konstantin Novoselov were 'playing' with graphite at the University of Manchester in 2004.
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Tributes from the UAE's personal finance community
• Sebastien Aguilar, who heads SimplyFI.org, a non-profit community where people learn to invest Bogleheads’ style
“It is thanks to Jack Bogle’s work that this community exists and thanks to his work that many investors now get the full benefits of long term, buy and hold stock market investing.
Compared to the industry, investing using the common sense approach of a Boglehead saves a lot in costs and guarantees higher returns than the average actively managed fund over the long term.
From a personal perspective, learning how to invest using Bogle’s approach was a turning point in my life. I quickly realised there was no point chasing returns and paying expensive advisers or platforms. Once money is taken care off, you can work on what truly matters, such as family, relationships or other projects. I owe Jack Bogle for that.”
• Sam Instone, director of financial advisory firm AES International
"Thought to have saved investors over a trillion dollars, Jack Bogle’s ideas truly changed the way the world invests. Shaped by his own personal experiences, his philosophy and basic rules for investors challenged the status quo of a self-interested global industry and eventually prevailed. Loathed by many big companies and commission-driven salespeople, he has transformed the way well-informed investors and professional advisers make decisions."
• Demos Kyprianou, a board member of SimplyFI.org
"Jack Bogle for me was a rebel, a revolutionary who changed the industry and gave the little guy like me, a chance. He was also a mentor who inspired me to take the leap and take control of my own finances."
• Steve Cronin, founder of DeadSimpleSaving.com
"Obsessed with reducing fees, Jack Bogle structured Vanguard to be owned by its clients – that way the priority would be fee minimisation for clients rather than profit maximisation for the company.
His real gift to us has been the ability to invest in the stock market (buy and hold for the long term) rather than be forced to speculate (try to make profits in the shorter term) or even worse have others speculate on our behalf.
Bogle has given countless investors the ability to get on with their life while growing their wealth in the background as fast as possible. The Financial Independence movement would barely exist without this."
• Zach Holz, who blogs about financial independence at The Happiest Teacher
"Jack Bogle was one of the greatest forces for wealth democratisation the world has ever seen. He allowed people a way to be free from the parasitical "financial advisers" whose only real concern are the fat fees they get from selling you over-complicated "products" that have caused millions of people all around the world real harm.”
• Tuan Phan, a board member of SimplyFI.org
"In an industry that’s synonymous with greed, Jack Bogle was a lone wolf, swimming against the tide. When others were incentivised to enrich themselves, he stood by the ‘fiduciary’ standard – something that is badly needed in the financial industry of the UAE."
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Directors: Min Geun, Oh Yoon-Dong
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Israel Palestine on Swedish TV 1958-1989
Director: Goran Hugo Olsson
Rating: 5/5