Youth and Finance In The Gulf: A Match Made In Heaven Or A Disaster Waiting To Happen? by Caron Jones

Youth and finance in the Gulf: a match made in heaven — or a disaster waiting to happen?

As technology and innovation progresses, the future for our youth is constantly changing and this is clearly seen in the dynamic evolution of the finance sector. From digital wallets and investment apps to buy-now-pay-later (BNPL) schemes such as Tabby, and fintech credit, the gateway to financial markets are now wide open. But along with the upside of inclusion and entrepreneurship, one is faced with the following question: do these innovations empower youth-led growth, or does it set the stage for economic failure?

The promise: digital finance meets a young demographic

Taking both UAE and Saudi Arabia as an example, a deep penetration in the fintech market can be identified for both economies. UAE’s fintech market is expected to expand to USD 81.55 billion by 2030 (it is currently at USD 46.67 billion) and Saudi Arabia is set to enjoy a healthy compound annual growth rate of 13.7% between 2025-2034. A major driver of this growth can be attributed to both the implementation and adoption of digital payment platforms by both the countries respective governments and central banks. The UAE is targeting 90% of transactions to be cashless by 2026 and in Saudi Arabia it is already reported that they have achieved 98% of contactless payments. Digital wallet adoption especially by GenZ and onwards have increased with 54% of GenZ in the UAE being open to BNPL and 36% of GenZ in Saudi Arabia likely to have a form or digital wallet. 

Additionally, micro-investment platforms, such as Stake, that require a low amount of initial capital ease the barrier of investment for GenZ in both the UAE and Saudi Arabia. This allows the demographic to make major financial decisions such as property purchases at an early age. In 2024, 12% of GenZ accounted for property purchase in the UAE and a report by Mckinsey and Company, have found Saudi Arabia GenZ’s are more inclined to make riskier purchases and are willing to splurge. 

But the hazards are tangible while the growth in the fintech industries indicates youth integration, how effective is it? 

There have been reports of increase in household debt in both regions. In the UAE, the average consumer debt has reached $95000 per household, and household debt as a percentage of the GDP has risen from 20.7% in 2022 to 25.4% in 2024. According to Nexus a main driver of this debt is the overconsumption by UAE residents. This overconsumption could be likely sourced from the implementation of finance platforms that allow for consumers to make quicker and easier purchases. Likewise a similar case is occurring in Saudi Arabia, by December 2024, household debt had reached 134 billion USD and by March 2025 the household debt to GDP ratio had increased to 31.3%. 

Currently UAE’s e-commerce market is valued at 11.05 billion USD, along with rapid adoption of BNPL of 39%, consumption is constantly at an increase. The same trend is seen in Saudi Arabia, where 70% of online purchases are BNPL Gross Merchandise Volume. However, this overwhelming consumption is causing more financial burden to be placed unto consumers at a young age. Carol Glynn from Arabian Business states “It is concerning when it causes consumers to make more purchases than they can afford, leading to financial stress or debt. The UAE and Saudi Arabia are regions with high consumer spending so it may increase the risk of overspending,” which causes the entire economy to overheat and increases inflation. 

Moreover, the security of many of these platforms have come to light, with a recent scam that had caused a resident in UAE to lose AED 20,000 due to a hacking incident and many banks pressuring young people to sign up to many of their finance schemes or take a credit card plan with them, incessant calls and emails. This paired with the lack of adequate financial literacy taught to the younger generation is causing them to have low debt repayment rates.

What is being done now? 

Both Saudi Arabia and UAE Central Banks have now implemented stricter regulations on BNPL companies, such as imposing credit limits and a restriction on the amount of fees that can be charged to customers when they use their services, for example the CBUAE has mandated that fees must not exceed 30% of the original amount for borrowers. 

While it is excellent and necessary to have these regulations in place, the risk with transforming the very way we use money will forever be present, especially as it enters the digital space. More secure countermeasures can be utilised such as biometric security like the UAE PASS that allows residents to access both government and financial institutions do provide a protective barrier against scams and hacks, however, human behaviour is a factor that cannot be controlled completely. With freer use of money, more reckless financial decisions are bound to happen, but we can try to control it by ensuring that adequate financial skills are taught and secure monitoring of funds are present. With these foundations firmly set for our younger generations, we can at least expect fluctuations and prepare for them.

References:

Arab News (2024) Saudi Arabia nears cashless society with 98% contactless payment: Visa executive, Arab News, 28 October [Online]. Available at: https://www.arabnews.com/node/2577110/business-economy (Accessed: 14 December 2025).

Arabian Business (2024) UAE, Saudi ‘Buy Now, Pay Later’ demand on the rise but experts call for caution as youth debt balloons, Arabian Business, 20 May [Online]. Available at: https://www.arabianbusiness.com/industries/retail/uae-saudi-buy-now-pay-later-demand-on-the-rise-but-experts-call-for-caution-as-youth-debt-balloons (Accessed: 14 December 2025).

Foloosi (2024) UAE Moves Toward a 90% Cashless Economy by 2026, Foloosi Blogs [Online]. Available at: https://blogs.foloosi.com/view/UAE-Moves-Toward-a-90-Cashless-Economy-by-2026 (Accessed: 14 December 2025).

Gulf News (2025) Buy Now Pay Later (BNPL) fraud causes Dh20,000 loss for UAE resident, Gulf News, 6 August [Online]. Available at: https://gulfnews.com/living-in-uae/banking/buy-now-pay-later-bnpl-fraud-causes-dh20000-loss-for-uae-resident-1.500222951 (Accessed: 14 December 2025).

Mordor Intelligence (2025) UAE Fintech Market – Size & Share Analysis (2025–2030), Mordor Intelligence [Online]. Available at: https://www.mordorintelligence.com/industry-reports/uae-fintech-market (Accessed: 14 December 2025).

The National News (2021) Is the buy-now-pay-later model a win for consumers or a potential debt trap? The National [Online]. Available at: https://www.thenationalnews.com/business/money/2021/10/05/is-the-buy-now-pay-later-model-a-win-for-consumers-or-a-potential-debt-trap/ (Accessed: 14 December 2025).

The National News (2025) Emiratis owing far too much, too young, The National [Online]. Available at: https://www.thenationalnews.com/uae/emiratis-owing-far-too-much-too-young-1.461314 (Accessed: 14 December 2025).