Banks widen offerings as UAE school fees climb
As thousands of parents pore over the latest school rankings released this week by education authorities in Dubai, banks are already tapping demand for education-focused loans ahead of the start of the next financial year.
Average school fees in the UAE can vary widely – Dh22,042 in the Indian school system compared with Dh50,678 in the British system – and as those fees creep higher, banks are responding with tailored products.
“Parents are not aware of how they can financially prepare for their child’s future,” said Gifford Nakajima, HSBC’s head of wealth development in the Middle East and North Africa region. “While there is an evident tendency to fund these costs through current incomes, parents have to realise that they need to move beyond relying on these short-term approaches to funding their child’s education.”
A survey recently released by HSBC found that UAE parents typically only earmark 31 per cent of funds for their children’s needs to education, compared with the global average of 43 per cent.
And 67 per cent of those polled in the UAE said that they wished they had started saving for their children’s education earlier.
Long-term schemes available in the UAE include ADCB’s Unit Linked Savings Plans and HSBC’s Savings Plus Plan, with products such as Emirates NBD’s Income Builder – Education plan and Citibank’s College Saving Plan targeted directly at providing for education fees.
For those who did not start saving early and need a bit of help with the fees, banks are also offering short-term loans to help with cash flow issues.
United Arab Bank’s Cash Flow Loan, launched in March, offers up to Dh400,000 for either education or rental costs, payable over 12 months.
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Published: May 1, 2014 04:00 AM