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Friday , November 16 2018

Loan shark operations in Kuwait

I am looking for a legal advise as I am facing serious problem due to lack of my passport. I am residing in Kuwait since November 1998 and working in a private company.

I took a loan of KD 2,000 from a private loan lender on 4th July 2017 at the interest rate of 10%/month. They asked me make (Iqrar den) from court and submit my original passport as guarantee. I made iqrar den for KD 2,000 as I am borrowing KD 2,000 credit from a money lender and I will return within 10 months KD 200 monthly.

I submitted iqrar den and my original passport to the money lender then he gave me KD 1700, as he deducted 10% interest of one month. After one month again I paid interest KD 300.

Then third month interest I could not pay due to some personal issues. He called me to his office and asked me to sign a kambiala of KD 500 (KD 300 interest + KD 200 late fine) and I signed. Again I paid interest two more months KD 300 + KD 300. But unfortunately in the middle of December 2017 I lost my job and since then I could not pay him interest.

Now the main problem is my Visa expired on 30th March 2018 and I am running behind him since 23rd March 2018 to release my passport for residency renewal but he is not ready to release my passport.

Currently I am illegal in Kuwait as my residency expired on 30th March 2018. Please advise what should I do now, should I go to police station.

Name withheld

Answer: These private money lenders popularly known as loan sharks are operating an illegal business in Kuwait.

In fact, while the law doesn’t necessarily prohibit an individual from giving a loan to another, the law unambiguously makes it an offence for interest to be charged for such a loan granted.

To curtail the flourishing business of these loan sharks, it is a high time that people like you take a stand. As a first step we advise that you try again to convince him to release your passport to you to enable you sort out your residency issue. If he remains intransigent, we suggest you file a case against this loan shark at a police station for illegally keeping your passport and making it possible for you to renew your residence permit.

The loan and interest issues will crop up in the course of dealing with the passport issue. And here you have to take a stand. If you can’t get witnesses to prove that this man loans money to people including you and that you have been paying him interest on you loan.

The man might dispute your claim of him charging you interest but agree that he had only extended a loan of KD 2,000 to you which you have refused to repay in our calculation you have so far paid an interest of KD 1,700 on the KD 2,000. If this is not outrageous we don’t know what it is.

In our estimation if you can demonstrate successfully that you have paid this amount in interest charges the man might issue that these payments were only installment for the loan settlement since he knows the consequences of agreeing that they were indeed interest payments.

In this scenario you will be left with KD 300 to give to the ‘shark’. On the other hand, if you can’t prove payments of the interest charges the KD 1,700 would have gone to the drains.

The most weekly settlement here might be that you would be asked to live up to your contraband obligations (iqar deen) and settle the KD 2000 loan.

You will however be saved from continuing to pay the illegal interest payments. We must however caution that in what ever step you take you should be aware that some these loan sharks can be ruthless as they are tied to some of influential men. It is therefore all up to you as to whether you want to take a stand or not.

 

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