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Saturday , February 22 2020

‘Some banks plan to cut minimum salary limit for expats to obtain loans’

Decision expected to be taken within Q1 of 2018: sources

KUWAIT CITY, Feb 12: Some local banks are planning to reduce the minimum salary limit for expatriates to obtain loans, reports Al-Anba daily quoting informed sources.

They stressed that this step is aimed at attracting a new category of expatriates who receive monthly salaries that are less than the current salary limit, indicating that a decision in this regard is expected to be taken within the first quarter of 2018.

The source revealed that the current salary limit for expatriates to apply for loans is KD 400 in most banks while some banks has set a limit of KD 500 – KD 600.

They indicated that a large number of expatriates whose salaries range from KD 400 to KD 600 had applied for loans but their applications were rejected because of the salary limit.

Meanwhile, statistics prepared by the Central Bank of Kuwait indicate a decrees in credit at Kuwait banks in November 2017. It revealed that the value of credit facilities offered to expatriates in November 2017 was KD 35.4 billion which was KD 35.6 billion in October 2017.

The average reduction rate was 0.4 percent, and has since been dropping. Consumption loans have been witnessing a drop of 4.28 percent per year. Some banks target high-salaries clients due to which they have set the minimum salary limit as KD 1,000, and they also focus in financing companies.

Other banks minimize the conditions for expatriates who can repay the loans within three years. These conditions include the expatriate should have been working for a long time. These banks also ask the company where the expatriate works to transfer his indemnity to the bank if he fails to pay the loan installments or if his contract is terminated.

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