SMEs fund delays payback
KUWAIT CITY, Oct 13: Chairperson of parliamentary Financial and Economic Affairs Committee MP Safa Al-Hashem confirmed that the committee met with Finance Minister Barrak Al-Shitan, Central Bank of Kuwait Director Muhammad Al-Hashel and Kuwait Investment Authority Director Farouq Bastaki to discuss the amendments to the bill on supporting the economy due to the coronavirus crisis.
Al-Hashem refuted the allegation that only KD 500,000 is allocated for small and medium enterprises (SMEs), stressing this is not true. She explained the bill is aimed at supporting the economy as a whole, pointing out the private sector constitutes 32 percent of the total income of Kuwait and this is divided into three percent for SMEs and 29 percent for other businesses.
She said the capital of some businesses is about KD 5 million and they are not small, medium or big as there are upper medium companies and these are the companies referred to as ‘other clients’ stipulated in the bill. She added the allocated amount – KD 3 billion – is not part of State money, clarifying this money is for the banks and the role of the State is to guarantee the loans.
She added the loans will be supervised by the Central Bank of Kuwait in order not to leave any gap for fake companies to obtain benefits illegally. She said the loans will not be given in cash as the banks will directly pay for the financial commitments on behalf of the owners of companies. She affirmed the bill stipulates two years grace period for SMEs to start the payment of loans and only one year for bigger companies.
In addition, member of the Financial and Economic Affairs Committee MP Saleh Ashour has unveiled his plan to vote against the proposal of the government to support businesses affected by coronavirus. He confirmed attending the meeting between officials of various public institutions and Finance Minister Barrak Al-Shitan on Tuesday, indicating he reached the conclusion that the government’s bill is in favor of major businesses and provides too little for young entrepreneurs who own small and medium businesses.
He pointed out the amount allocated for small and medium enterprises (SMEs) is KD 500,000 only, while the allocation for major businesses is KD 2.5 billion. He said the National Fund for Small and Medium Enterprises – a subsidiary of the Ministry of Commerce and Industry – has KD 2 billion but it spent only KD 180 million so far. He asserted this fund has the ability to solve the problem and provide ample support for SMEs.
By Saeed Mahmoud Saleh Arab Times Staff and Agencies