KUWAIT: The Central Bank of Kuwait has revealed that the number of people who have taken consumer or housing loans amount to 550,194, and the percentage of people unable to repay their loans is around 2.3 percent of total loaners. "The total amount of the loans is KD 14.7 billion, 13 billion of which is for housing and 1.7 billion for consumption," the CBK said in data published under the title 'Facts about loans and personal finance operations for consumption and housing'.
"The adherence rate is around 97.5 percent, which is high under supervision regulations that aim to protect the banking sector, increase financial stability and a basis for providing such loans," the CBK said. "What supports this adherence rate are the procedures put in place by the CBK, which involves continuous inspection from outside supervisors of all loans. Moreover, the CBK's own supervision and field inspections supervise adherence to bank instructions," it added.
"All loans by citizens have a special importance, as it affects a large number of citizens and its relative importance to banks, which in turn controls growth in order to maintain cash and financial stability," it said. "Instructions define consumer loans as a personal loan that does not exceed five years, which benefits the customer to finance personal needs with a maximum of KD 25,000 or 15 times the basic salary. As for housing loans, they are long-term loans that do not exceed 15 years for a maximum of KD 95,000," the Central Bank clarified.
"In order not to increase the load on loaners, instructions include that the percentage of repayment does not exceed 40 percent of the loaner's salary and 30 percent for retired loaners, with a maximum of 3 percent interest," it said. It is worth mentioning that the interest rate cannot be deducted in advance, as they are reviewed every five years for housing loans. The maximum change rate for interest is 2 percent over or under the specified rate.