As part of ‘The Debt Panel’, The National published an article about a business owner based in Dubai who owes over AED 230,000 in debt, and is now struggling to run his business and keep up with his debt repayments in India and the UAE…
I was sacked from a company in April 2015, where I worked as an operations manager earning Dh6,500. I decided to start a new company trading in marine spare parts to take revenge and show my old employer my courage. To raise the initial capital I took a loan in my home country of India for approximately Dh82,000, with an interest rate of 14 per cent for a tenure of three years. I still owe Dh80,000, which I need to pay over the next 18 months. Everything went fine in the beginning but the repayments on my loan as well as the non payment of credit card bills in the UAE pulled me into more debt. Plus, whenever I had no money in the UAE for daily expenditure, I used my Indian credit cards to purchase groceries – so on them I owe a further Dh8,000. I use my pension from serving in India’s armed forces to pay for the credit card debts. Here in the UAE I have five credit cards and I have also used the cards of two friends. In total, on those seven cards, I owe Dh152,300. The interest alone on all these cards comes to a huge amount and it’s taking more than the profit of my business every month. Plus I have to pay my house rent of Dh1,500 a month and my car payment of Dh1,717. Those who had stood by me offering support then turned their back on me when the finance matter entered. I have already downsized to a studio flat with the lowest rent in an industrial area to cut down my expenses. I no longer have any staff in my company and had to leave my office due to non payment to the real estate owner. I’ve ended up with no money to run my business and no bank will offer me a loan. The problem was because companies that I had supplied goods to kept their payments pending. In total I’m owed Dh125,000 so I cannot stop the business but I also cannot do any more business as I have no money to fund it. What do you advise?
Here is what Ambareen Musa, one of the debt panelists and Founder & CEO of Souqalmal.com, had to say.
The decision to start a business should be well-thought out and carefully planned. However, in this case it is clear that you solely relied on debt and without much financial planning.
So now you have Dh88,000 worth of loan and credit card debt in India, and Dh152,300 worth of credit card debt in the UAE. Since, your monthly pension in India is helping you repay the debts back home, your primary focus should be to pay off the heavy credit card debt you’ve accumulated here…
For full article go to The National.
