United Arab Emirates: It is illegal for individuals to lend money with interest; stiff fines and jail time apply – News


However, an individual can lend money to friends or acquaintances without interest.


Published: Sun 15 May 2022, 11:19

I have saved money over the years. Is it legal for me to lend some of this money to acquaintances for interest? If so, what should I do if the person does not make the refunds?

Answer: In accordance with your questions, the provisions of Federal Law No. 31 of 2021 on the Criminal Code of the United Arab Emirates (the “Criminal Law of the United Arab Emirates”) relating to an individual lending money to others persons for interest apply.

In the United Arab Emirates, it is illegal for an individual to lend money with interest. Only banks and financial institutions licensed in the UAE are allowed to lend money on interest in accordance with the regulations determined by the UAE regulators. An individual who undertakes to lend money on interest is considered a crime in the United Arab Emirates and is liable to imprisonment and a fine as set out in Sections 458 and 459 of the Criminal Law of the United Arab Emirates, which reads as follows:

Article 458 UAE Criminal Law:

“Will be punished by imprisonment for at least one year and a fine of at least 50,000 Dh any natural person who lends to another natural person with interest in return for the postponement of repayment, in any form of action civil and commercial transactions, whether this interest is explicit or hidden.

“Shall be considered as hidden interest, any commission or advantage of any kind whatsoever that the creditor will demand, if it is proven that this commission or this advantage is not accompanied by a real legitimate advantage or service that the creditor has returned.

“The truth of the origin of the debt and of the hidden interest can be proven by any means.

“If the offender takes advantage of the debtor’s need, weakness or whim to commit the crime provided for in this article, this will be considered an aggravating circumstance.

Article 459 UAE Criminal Law:

“Any natural person who used to lend with interest will be punished with a temporary prison sentence for a maximum of five years and a fine of at least 100,000 Dh.”

Based on the aforementioned legal provisions, if a person is convicted for lending money with interest, he or she can be sentenced to one year of imprisonment as well as a fine of at least 50,000 Dh.


However, an individual can lend money to his friends or acquaintances without interest. But it is prudent for this lender to enter into a written agreement with the borrower regarding repayments to protect their money. In such a case, if the borrower does not repay the money, the lender can file a civil suit.


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