The corporate problems stemming from the financial crisis may have perhaps attracted the most headlines, but individuals too have fallen victim to the financial crisis. For banks in the region that has brought many problems to the surface.

Just as in the corporate world, individuals had borrowed too much and got involved in too much speculative activity. When company’s started laying people off in early 2009, often they just left, leaving behind huge debts from car loans, housing loans, credit cards and other personal loans.

Fortunately, things are improving now. Bankers at MEED’s Middle East Retail Banking 2010 conference say the number of customers skipping on their debts has dropped dramatically. That is a relief. Bankers also realise that they wrote too many cheques without knowing much about where the money was going.

Tighter regulations are now being called for, including limits on how much people can borrow as a percentage of their salary, should limit this in the future. The development of strong credit bureaus should also prevent unscrupulous borrowers from getting loans from several banks and weighing themselves down with debt.

But ultimately regulations can only go so far. As many delegates at the conference realised, retail lending is often governed by ethics, rather than regulation.