Banks become “stricter” in granting loans to expatriates – ARAB TIMES

“New limits set for acceptable wages for granting credit”

KUWAIT CITY, January 10: The Central Statistics Administration released a report which shows that the number of expatriates who receive monthly salaries of more than 480 dinars is around 13.48 percent among the 2.39 million workers working in Kuwait, 96 percent of those working in the private sector and the rest of the government, reports the Al-Rai daily. Sources told The Daily that the outlook for granting expatriate loans has changed dramatically given the severity of the impact of the pandemic, and that some banks that were historically known to lend money to expatriates without reserve have become stricter in their behavior and some banks have returned to adopt a more stringent policy in granting loans to this category of people by raising their salary ceilings – not less than 700 dinars – in addition to fulfilling other traditional conditions .

The sources pointed out that these banks have set new limits for acceptable wages for granting credit, which stipulate not to grant expatriates with wages below 700 dinars new consumer loans, as well as not to grant new consumer loans. not schedule existing finances for these clients, in addition to stopping funding. newly employed expatriates, unless the client is part of a guaranteed functional scope or elite clients. These banks have been excluded from the new salary limit for expatriates who have sufficient end-of-service gratuity to repay the loan and work in ministries such as health, education and endowments.

To guarantee
Of course, respecting the new salary cap in some banks does not mean guaranteeing the financing of its owner, because it is required for non-employees of the ministries that the client benefit from an end-of-service allowance which covers the entire amount. his bonuses, and that he be in a stable employment sector which preferably falls within the secure employment field. With the new bank salary limits, the segment of residents deprived of financing is increasing, until further notice, knowing that other banks, even before the “Corona” crisis, tended to reduce their share of resident customers, by focusing on Kuwaitis. and residents whose salaries start at a thousand dinars.

At the same time, other banks, also known to welcome residents, kept their salary caps unchanged, as sources revealed that the behavior of these banks did not include raising salary caps and was content with stringent other conditions for granting loans, including the quality of the client, whether it is his credit history or the results of the analysis of his professional status, and other considerations which rank him. The sources said some banks still lend to residents within normal salary limits, whether they are in the public or private sector, provided the eligible worker has job stability and maintains a stimulating credit record, indicating that banks generally converge on the selection of the resident eligible for financing although some loan requirements differ from bank to bank.

It should be noted that many banks have raised their salary caps for financing residents, especially after the spread of the “Corona”, and although they still allow residents to be financed with salaries starting at 400 dinars, the news Funding opportunities for residents with low salaries, precisely less than 350 dinars, have fallen sharply in the portfolios of most banks. It should be noted that a previously published study indicated that the share of Kuwaitis in consumer loans is around 60%, compared to 40% for non-Kuwaitis, while the share of Kuwaitis in “housing” is 72%, compared to 28% for non-Kuwaitis. .

According to official data, personal equipment increased last November by around 353 million dinars (+ 1.87%) compared to October, to reach 19.22 billion, while it increased by 1.97 billion ( + 11.42%) since the start of 2021, and they have increased to 2.068. billion (+ 12.06%) compared to November. 2020. Installment loans (housing) have increased by around 194 million (+ 1.38%) on a monthly basis, reaching 14.252 billion at the end of last November, while it increased by 1.541 billion (+12 , 12%) since the start of 2021, and has seen an increase of about 1.624 billion (+ 12.86%) on an annual basis. As for consumer loans, they increased by 24 million last November, compared to October (+ 1.34%), to reach 1.819 billion, and have reached 212 million since the start of 2021 (+ 13.19%), and recorded a growth of 215 million (+ 13.4 percent) compared to November 2020. Loans for the purchase of securities increased by 178 million monthly (+6.9 percent) to reach 2, 76 billion at the end of November, and increased by 181 million (+7.02 percent) from their level at the beginning of the year, and increased by 209 million (+ 8.19%) compared to November 2020.

Rosemary C. Kearney