Major Kuwait banks to lift ‘loan ban’ on expats

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■ Certain jobs, particularly those at risk of Kuwaitization, remain ineligible for financing
■ Eligible borrowers include judges, doctors, teachers, engineers, association employees, and technicians
■ Stability factors such as 10 years of service and employment at reputable companies reduce risk
■ Financial stability, including deposits, can qualify customers for loans exceeding 25,000 dinars
■ Increased competition among banks may attract more expatriate borrowers
■ Credit slowdown has prompted banks to ease lending restrictions for expatriates

KUWAIT CITY, May 26: After a four-year hiatus on lending to non-Kuwaitis, major banks are revising their strategies to spur credit growth amidst a slowdown in individual financing since 2023, reports Al-Rai daily. It has been learned from reliable banking sources that major banks have instructed their employees to lift the block on resident financing, which has been in place since the COVID-19 pandemic.

This shift, however, is not unrestricted and comes with several conditions. Notably, customers should have a minimum end-of-service bonus reflecting at least ten years of service and be employed by a major, stable company.

Loan Eligibility and Conditions: Recent developments indicate that non-Kuwaiti employees in government sectors with a minimum salary of 250 dinars are now eligible to borrow. For private sector employees, the salary requirement is at least 500 dinars, with additional benefits such as expanded end-of-service bonuses mitigating default risks. The eligible job list includes traditional roles like judges, doctors, healthcare workers, engineers, and teachers.

Additionally, employees in cooperative societies, construction supervisors, journalists, administrators, technicians, and similar professions are also considered. For customers meeting the specified conditions, loans exceeding the value of the end-of-service bonus may be available, with additional margins varying based on job type, grade, and stability.

The loan amount is capped at 25,000 dinars, as stipulated by the Central Bank of Kuwait, with installment limits determined by the client’s solvency, salary, end-of-service bonus, and deposits.

Competitive landscape: This development is significant as major banks are now entering a competitive field previously dominated by medium and small banks. These smaller banks had already opened lending to non-Kuwaitis with salaries starting at 300 dinars and minimal adherence to end-of-service bonus conditions. The increased competition is likely to attract more non-Kuwaiti customers.

Strategic shift: The shift in lending policy is driven by a slowdown in credit portfolios at both individual and corporate levels, prompting banks to ease restrictions. Despite maintaining a conservative approach, banks are now willing to finance non-Kuwaitis with end-of-service bonuses close to or exceeding loan values, provided their employers are reputable and stable.

Challenges with Kuwaiti borrowers: Another factor in easing restrictions on expatriates is the limited credit availability for Kuwaiti customers, many of whom have been credit-restricted for over a year due to Central Bank regulations. Additionally, the rate of new Kuwaiti recruits does not align with the targeted credit growth rate.

Job security and Kuwaitization: Banks will continue to exercise caution, particularly with government jobs susceptible to Kuwaitization. There is a red list of jobs ineligible for lending, primarily those under strict Civil Service Commission guidelines requiring the appointment of Kuwaiti citizens.

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