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Saturday , November 28 2020

‘Kuwait records lowest rate of savings in the Gulf region’

Average savings per Kuwaiti household KD 279 per month

KUWAIT CITY, Jan 8: A study by McKinsey & Company shows Kuwait recorded the lowest rate of savings in the Gulf region, reports, Al-Rai daily.

The results of the study found that the percentage of households in Kuwait does not exceed 8%, compared with a previous study that included neighboring Gulf countries, where the UAE ranked first with 37% and Saudi Arabia about 25%.

According to the study by Mc- Kinsey & Company for the Central Bank of Kuwait and the Credit Bank, the average savings per Kuwaiti household was 279 dinars per month, based on an average monthly expenditure of 3,072 dinars, compared to the average monthly income of the family of up to 3,351 dinars.

In its study, McKinsey relied on key factors, most notably financial stability, the propensity to save, and the saving environment. The study involved 1,226 families, comprising 9,443 individuals, while the average number of family members was 8.

McKinsey said less than 30 percent of the participants in this study were the only source of income for their families. The number of respondents in the sample was 2,914. The study showed that the number of Kuwaiti borrowers reached 429,000, of which 404,000 fell in the category of ‘consumer’.

The loan portfolio witnessed a compound growth rate of 14 percent from 2000 to 2017, jumping from one billion to 12 billion dinars, compared with 18 percent between 2000 and 2008 and about 11 percent during the period from 2009 to 2017. McKinsey distributed borrowers in 5 categories, ranging from 24 years to 55 years, with a total of 404,200 borrowers, making up 99.5 percent of the total workforce of 406,201 with an average debt of KD 23,382.

The survey shows that the 25-34 age group represents the highest number of borrowers in the consumer and microcredit category, with 81 percent of the total workforce at an average debt of 22,212 dinars.

The 35- to 44-year-age group ranked second in terms of the number of borrowers who make up 87 percent of its total labor force, which is estimated at 128,385 with an average debt of 27826 dinars. The 45 age group ranked third, with 76,290 borrowers, with an average debt of 27,742 dinars, representing 135 percent of the total workforce.

In contrast, the age group of 55 years and above, including retirees and those who meet the conditions, ranked last. According to McKinsey, there are 56,392 borrowers in this segment at an average of 15,237 dinars.

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