Kuwait banks see 68.8% ‘drop’ in public services sector financing

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KUWAIT CITY, Oct 15: During the first eight months of 2023, local banks in Kuwait provided significantly less financing to the public services sector, with a sharp decrease of 68.8%, totaling 48 million dinars. This marks a substantial drop from 69.7 million dinars during the same period in 2022. Notably, in August, financing for the public services sector was only about 100 thousand dinars, while there was no such financing provided by local banks in July.

The decline in funding to the services sector coincides with a broader drop in new credit facilities provided to all sectors, falling by approximately 93.1 million dinars, or 0.6%, from 15.76 billion dinars in the first eight months of 2022 to 15.669 billion dinars during the same period in 2023. However, there was an increase in total credit facilities for all sectors during August, surging by 3.2% or roughly 63.6 million dinars compared to July, reaching 2.012 billion dinars.

In comparison to August 2022, this is a considerable increase from 1.354 billion dinars. The cumulative balance of financing provided by local banks to the public services sector experienced notable growth, rising by 11.8% or 33.8 million dinars since the start of 2023, amounting to 319.3 million dinars in August. On a monthly basis, this represents an 11.7% increase of 33.6 million dinars compared to July.

However, on an annual basis, it decreased by 17.2%, equivalent to approximately 46.9 million dinars compared to August 2022. The overall balance of total cash credit facilities provided by banks for all sectors experienced a slight decrease of 0.3%, amounting to 163.2 million dinars during the first eight months of 2023. It decreased by 0.06% or about 34.4 million dinars in August, compared to July. However, it increased by roughly 1.264 billion dinars compared to August 2022, demonstrating an annual growth. The dominance of the government over the public services sector in Kuwait is a significant reason behind the decline in private sector investments in this field. The state’s control over the majority of services, including education, healthcare, and social services, has resulted in reduced financing from banks to this sector.

By Ahmad Fathi
Al-Seyassah/Arab Times Staff

This news has been read 1495 times!

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