26/11/2023
4688 times read
26/11/2023
4688 times read
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KUWAIT CITY, Nov 26: Banks have recently adopted a novel approach to competing in the individual financing market through unconventional means, part of a competitive race to expand their shares in a sector that has experienced a slowdown since the start of the year, as per official data, reports Al-Rai daily. Reliable sources have revealed that certain credit policy influencers have been actively engaged in attracting new customers with enticing offers, particularly targeting Kuwaitis with high job qualifications.
The overarching theme of this phase can be summarized as "the escalating practice of pre-packaging personal loans and rescheduling them even before their regulatory deadlines," offering more favorable interest rates. They explained that while intense competition for lending to customers is not a new phenomenon in banking, the recent change is associated with altering the method of competing for customers, particularly focusing on the segment that does not meet the criteria for loan rescheduling.
This is achieved by hinting at the prospect of cheaper interest rates and the broader benefits of loan rescheduling, coupled with the opening of new accounts. Additionally, there is the option for customers to settle the debt in cash if they are unable to meet the conditions for early settlement, provided they offer specific guarantees. The remaining loan difference is withheld in the customer's account until the contract is fulfilled. The sources clarified that this behavior is not widespread across the general customer base but is primarily directed at individuals with a high credit rating or those considered elite customers, as per credit inquiry reports issued by the Credit Information Network Company (Ci-Net).
Furthermore, some banks exclusively target customers who meet specific conditions, employing a strategy that swiftly activates the financing contract and deposits the loan into the customer's account before their existing bank realizes it may lose its business. This is achieved by delaying the issuance of Certificates of Clearance to other banks.