Banks are becoming “stricter” when it comes to lending to expatriates – ARAB TIMES

“New Limits Set on Acceptable Salaries for Lending”

KUWAIT CITY, Jan. 10: The Central Administration of Statistics released a report showing that the number of expatriates receiving a monthly salary of more than 480 dinars is about 13.48 percent of the 2.39 million workers in Kuwait – 96 percent of whom work in Kuwait’s private sector and the remainder in government, Al-Rai reports daily. Sources told the daily that the outlook for lending to expatriates has changed significantly, given the severity of the impact of the pandemic, and some banks, known in the past for wholeheartedly lending to expatriates, have in their behavior has become stricter, and some banks have returned a stricter policy in granting loans to this group of people by raising the salary limits – not less than 700 dinars – and meeting other traditional conditions.

Sources indicated that these banks are setting new limits on acceptable lending salaries, which stipulates that expatriates whose salaries are less than 700 dinars will not be granted new consumer credit and that existing finances will not be planned for these customers, in addition to Cease funding newly hired expatriates unless the customer is within a feature set or elite customer. These banks have been exempted from the new salary limit for expatriates who have a salary sufficient to repay the loan and who work in government departments such as health, education and foundations.

Adhering to the new wage limit at some banks does not, of course, mean guaranteeing the owner’s funding, as non-employed in ministries require that the customer have a tip that covers all of their bonuses and that they are in a stable area of ​​employment , which preferably falls under the safe workplace. With the new bank limits for salaries, the segment of residents who have been deprived of funding will grow for the time being, as other banks tended to reduce their share of domestic customers by focusing on Kuwaitis and residents with salaries of a thousand dinars or more before the “Corona” crisis.

At the same time, other banks, also known for accepting residents, have kept their salary limits unchanged, as the sources revealed that the behavior of these banks did not involve raising the salary limits and contented themselves with rigor on other conditions for granting staff loans, Last but not least, the quality of the customer, be it in relation to his credit history or the results of the analysis of his job status and other aspects that classify him. The sources said that some banks lend to residents within normal salary limits, regardless of whether they are in the government or private sector, provided the eligible worker has a stable job and stimulating credit, suggesting that the Banks generally converge in choosing the resident who is eligible for funding, although some credit requirements vary from bank to bank.

It is noteworthy that many banks have raised their limits for the salaries of resident financing especially after the spread of “Corona” and, although they still allow the financing of residents with salaries of 400 or more dinars, the new financing options for residents with low salaries, especially less than 350 dinars, fell significantly in the portfolios of most banks. It is noteworthy that a previously published study suggests that Kuwaiti’s share of consumer credit is around 60 percent, compared with 40 percent for non-Kuwaitis, while Kuwaiti’s “housing” share is 72 percent, compared with 28 percent for non-Kuwaitis -Kuwaitis.

According to official data, personal facilities increased by about 353 million dinars (+1.87 percent) to 19.22 billion last November compared to October, while they have increased by 1.97 billion (+11.42%) since the beginning of 2021 and increased to 2.068 billion (+12.06 percent) compared to November. 2020. Installment loans (apartments) rose monthly by around 194 million (+1.38 percent) to 14.252 billion at the end of November, while they have increased by 1.541 billion (+12.12%) since the beginning of 2021 and recorded an increase of around 1.624 billion (+ 12.86 percent) on an annual basis. Consumer credit rose last November by 24 million compared to October (+1.34 percent) to 1.819 billion and reached 212 million (+13.19%) since the beginning of 2021 and recorded a growth of 215 million (+13.4 percent) compared to that November 2020. Securities purchase loans increased monthly by 178 million (+6.9 percent) to 2.76 billion at the end of November and by 181 million (+7.02 percent) compared to the level at the beginning of the year and increased by 209 million compared to November 2020 ( +8.19 percent).

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