02/05/2026
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02/05/2026
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A constructive meeting was held between His Highness the Prime Minister and the Financial Action Task Force (FATF) to assess the requirements for exiting the grey list, review the progress achieved, and strengthen coordination mechanisms in this area. The meeting also aimed to develop a roadmap for the country’s economic recovery, particularly in light of recent developments that have affected various sectors. In another positive step, Minister of Finance Dr. Yaqoub Al-Rifai revealed the government’s intention to stimulate the economy to address the impact of recent events on the domestic market.
This includes the Central Bank of Kuwait’s directive to local banks to support the sustainability of economic activity and financial stability, provide facilities for companies, and avoid pressuring them to repay their dues by granting them additional time and flexibility. This particular issue has drawn considerable discussion, especially regarding the strict procedures adopted by commercial banks, which they claim are in line with Central Bank instructions.
This places borrowers under double pressure of covering monthly operating expenses while also facing stricter bank loan repayment requirements. This situation puts employers in a difficult position, as if they alone must bear the blame for all the problems, when in reality what they are facing today is the result of seven years of political and economic conditions, as well as the recent war. We must not forget that since 2019, the region has witnessed numerous crises that have cast a shadow over the local economy. No proper steps have been taken to address the root causes.
This has affected overall development and the economic cycle, placing significant pressure on debtors, whether individuals or corporations. Today, when we read the Minister of Finance’s statement, we find that the instructions issued to the Central Bank of Kuwait appear unusual, as do the procedures followed by commercial banks.
We also note that referring debtors to court for failing to make payments, even for a month or two, has become the norm, which places companies and individual borrowers in a very difficult position. Some may even face bankruptcy, which is the last thing the government wants. When countries face extraordinary circumstances, such as geopolitical or financial crises, governments usually instruct banks to reschedule debts and extend repayment periods. This benefits both banks and borrowers, as it helps stimulate the financial cycle and reduces inflation.
Other countries address the issue by injecting liquidity into the economy, which is in line with the state’s strategic objectives. As mentioned earlier, Kuwait is dealing with this problem in a way that differs from many other countries. For example, while many countries have decriminalized bounced cheques, this practice still exists in Kuwait. This situation weakens public confidence and turns government agencies into collection bodies for creditors, who may exploit borrowers’ needs to seize their assets and place them under severe financial strain, even by confiscating their salaries. We emphasize the legal and ethical principle that the creditor who has mismanaged their funds bears responsibility. It is good that the government is addressing this situation, but it would be even better to curb excessive demands by banks on companies.
The announced plan is a step in the right direction, but it requires additional support to help companies overcome the significant financial burdens accumulated over the past seven years, culminating in the recent war that affected the entire region. It is indeed better late than never.
However, increasing development spending remains the most crucial step. The most dangerous approach for national economies is restricting financial spending and imposing stricter conditions on companies and borrowers, as this leads to accumulated deficits reflected in several negative indicators, most notably in the highly sensitive business sector. Finally, why are some banks being so strict in collecting loan installments, although they already hold sufficient guarantees in the form of assets and properties that may exceed the loan amount by one to four times? Rescheduling installments would help ease the situation.
