Visits to Souqalmal.com, the #1 personal finance and insurance comparison site in UAE increased by 30 percent in the second quarter of 2016, when compared to the same period last year. More UAE residents are leveraging the personal finance comparison site to find products like loans, insurance, accounts and credit cards best suited to their needs.
The website’s quarterly analysis reveals some key trends shaping the banking and insurance market in the country. Personal loans continue to be the most sought after product, followed by credit cards and accounts.
Results show residents increasingly looking for value-for-money personal finance products, along with an increased demand for products deemed essential due to the current economic trends.
Personal loans retain ‘most visited’ status
Personal loans retained the largest share of visits (38 percent) across all personal finance categories on Souqalmal.com such as accounts, credit cards and loans.
Visits on Souqalmal.com’s personal loan pages have gone up by 50 percent this quarter compared to Q2 last year. This is a clear reflection of the rising demand for personal loans. According to the UAE Central Bank’s Credit Sentiment Survey (March 2016), banks reported seeing higher demand in Q1 2016, and expected it to moderately increase further in Q2.
There are 95 different personal loans listed on Souqalmal.com. Although the split between salary transfer and non-salary transfer loans on the site is roughly about 75:25, the non-salary transfer variants are still generating more visits. These loans are usually the only option for those who can’t commit their salary to the lending bank, already have one or more loans with other banks, or are simply not eligible to apply for a salary-transfer loan.
Credit cards with lower annual fees attracting more users
After personal loans, credit cards are next most visited personal finance category on the site and makes up for 28 percent of all visits on Souqalmal.com. When comparing Q2 2016 with the same period last year, credit cards witnessed a 40 percent growth, making them the second-most popular product category. There are over 230 credit cards listed on Souqalmal.com, and while features like cashback, dining and cinema discounts and air miles influence demand for specific products, there’s another feature that has emerged as a deciding factor for most users.
More users are looking for credit cards that are easier on the pocket. Looking at the second quarter’s ten most popular credit cards on the site, the average annual membership fee (AMF) for these is AED 379. This is just about half the average annual fee of the top ten cards in Q2 last year – AED 733. Therefore, credit cards that come with low or no annual fees at all, or provide an option to have the annual fees reversed continue to reign as the most sought after.
35% increase in visits for accounts, more users looking for interest-earning accounts
There are about 320 different bank accounts listed on Souqalmal.com – over 50 current accounts, 110 savings accounts and 160 deposit variants. All accounts categories combined, visits have gone up by 35 percent in Q2 2016, compared to the same period last year. With this, bank accounts have become the third most sought after personal finance product type on the site.
Further data from Souqalmal.com shows that within accounts, more users are looking for interest-earning accounts and specifically savings accounts. Savings accounts combine the best features of current and deposit accounts, offering a returns along with the flexibility of having access to these funds.
Home loans bring in 20% higher visits, more users opting for the variable rate option
Another popular product category on Souqalmal.com, home loans, saw a 20 percent increase in visits (quarter-on-quarter). Based on the 67 different home loan products listed on the site, the average home loan rate in the UAE currently is 4.14% p.a. (based on reducing balance). This is only marginally higher than the average rate of 4.09% p.a. one year back.
The second quarter results also reflect a change in consumers’ preferences regarding which interest rate arrangement they are choosing to opt for. The variable rate option has become more popular vis-à-vis the fixed rate option for the initial loan tenure. Considering that the fixed rate usually only applies for the first one to three years, it seems that more users are keen to find a good variable rate deal, by negotiating lower bank margins with the lender.