Banks In Kuwait Ease Restrictions On Lending Loans To Expats

After nearly four years of strict limitations on lending to non-Kuwaitis, major banks in Kuwait have begun to adjust their approach, signaling a shift in policy aimed at stimulating credit growth amidst a slowdown in individual financing since 2023.

Al-Rai learned from banking sources that major institutions have communicated internally about lifting restrictions on financing for residents, a move that was imposed during the COVID-19 pandemic. However, this shift is not without constraints. Sources reported that the new lending trend is more selective, with stringent criteria including a minimum ten-year end-of-service bonus and employment with a reputable, financially stable company.

Under the latest guidelines, non-Kuwaiti government employees earning salaries starting at 250 dinars are eligible for loans, while those in the private sector must earn a minimum of 500 dinars. Additional benefits, such as expanded end-of-service rewards, are also required, with banking institutions wary of default risks across all scenarios.

Eligible professions for borrowing include traditional roles like judges, doctors, engineers, and teachers, as well as newer categories such as cooperative society employees, construction supervisors, journalists, and technicians, among others.

Customers meeting the criteria are entitled to financing with an additional margin above the value of the reward, varying based on job stability and grade. However, loans are capped at 25,000 dinars, in line with Central Bank regulations. Installment limits are determined by solvency, including salary, end-of-service benefits, and existing deposits.

This shift in banking policy signals increased competition in the sector, as major banks vie for non-Kuwaiti customers, previously served primarily by medium and small banks. The move reflects a broader strategy to attract creditworthy borrowers amid a challenging economic landscape.

While banks maintain a conservative approach to lending, citing risk management concerns, the decision to ease restrictions underscores a need to balance prudence with growth aspirations. Banks remain cautious in financing government jobs subject to Kuwaitization initiatives, with certain roles excluded from lending eligibility.

The evolving landscape of lending to expatriates reflects a strategic response to market dynamics, as Kuwaiti banks navigate regulatory requirements and competitive pressures to drive sustainable growth in the banking sector.

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