Low-income expats squeezed out – Local banks ‘toughen’ their credit conditions
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KUWAIT CITY, Dec 30: Several local banks in recent months have toughened their credit conditions, especially for personal loans.
The daily quoting sources added some banks doubled the value of minimum salary for obtaining loans and now accept applicants earning no less than KD 800 monthly. Other banks have set the ceiling at KD 650, while the minimum salary condition for the remaining banks is KD 400 —just one or two banks still provide loans for employees earning about KD 300, sources said.
They explained that loans are currently provided under strict conditions, and applicants are required to present ‘Proof of Salary’ as stated on the work permit, ‘To Whom It May Concern Certificate’, and should be entitled to indemnity from the current employer to cover the loan.
They noted some banks oblige an applicant whose salary is below KD 500 to get a citizen to guarantee the loan and it’s not easy to find a citizen for that purpose, because most citizens have already secured loans or committed to one installment or another, while those without loans or installments want to keep their credit clear to be able to secure personal loans in future.
Recent statistics issued by the Central Statistics Department indicate expatriates earning KD 480 and above constitute 10.72 percent of the workforce and that the banks took the step to toughen credit conditions to avoid the risk in providing loans to low-income expatriates.
It is worthy of note that 59.29 percent of the total expatriate workforce receive less than KD 180 monthly, and those with salaries ranging from KD 180 to 360 constitute 24 percent, while 16.51 percent receive KD 360, and 14 percent earned KD 420 and above.
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