UAE banks have become less willing to lend to businesses and individuals, according to the latest quarterly credit sentiment report issued by the ­Central Bank.

At the same time, borrowers, especially owners of small businesses and expats, have become less keen to tap debt at a time when uncertainty about the ­future growth of the economy intensify.

“Results from the September quarter Credit Sentiment Survey revealed a downward trend in overall credit appetite for both business and personal loans,” the report said of its third-­quarter findings.

“The ongoing tightening of credit conditions for business loans suggested the reduced willingness to extend business loans among financial institutions, reflecting a reversion of conditions towards a slow path consistent with other indicators of economic activity.”

The Central Bank’s net balance measure in aggregate for business loans was minus 2.3 in the quarter to the end of September compared with +3.1 in the quarter that ended in June. Any reading above zero indicates growth.

The report noted that in the sphere of personal lending, the greatest drop in demand came from car loans and non-housing investment. But it was in lending to small and medium-sized enterprises that the Central Bank’s survey reported bankers’ greatest reluctance to lend.

“Survey results also revealed further tightening in credit standards, suggesting a higher degree of risk aversion in extending loans, especially to SMEs,” the Central Bank said. “This was evident in the reported tightening of credit standards pertaining to all the terms and conditions.”

The woes facing small business owners began to appear in earnest last year as the price of oil took a nosedive, losing more than 70 per cent of its value from its peak in mid-2014.

Abdulaziz Al Ghurair, the chairman of the UAE Banks Federation and chief executive of the Dubai-based lender Mashreq, said November last year that several small business owners may have skipped town, leaving about Dh5 billion worth of unsettled loans. In May, however, he said that some of the impact of that fallout had been contained. Still, that has not meant that SMEs are finding it easier to tap debt.