KUWAIT: Chairman of Kuwait Banking Association (KBA) Adel Al-Majed said the stimulus package announced by the Central Bank of Kuwait (CBK) recently makes KD 5 billion (nearly $16.5 billion) available for additional lending from local banks. The package includes easing the conditions previously set by the CBK for financing the economic activities and small and medium-sized enterprises (SMEs), thus enabling the local banks to help alleviate the impacts of the novel coronavirus (COVID-19), he said in an interview on Saturday.

"It will enable the banks to exercise their vital role in the economic growth through financing the businesses and clients who are in need of liquidity to continue their activities and avert long-term problems due to the current challenging conditions," Majed pointed out.

He noted that the local banks constantly coordinate with the CBK the steps to mitigate the impacts of COVID-19, revive the national economy and maximize benefit from the stimulus package. "The protective policies, being implemented by the CBK since the global financial crisis of 2008, led to building a strong capital basis and substantial accumulative reserves. Now, it is time to make use of these reserves," he said, noting that the global crisis posed by coronavirus is worse than the financial meltdown.

On a similar note, head of the financial and economic committee of the National Assembly MP Safa Al-Hashem said the stimulus package would help allay the concerns and burdens of businesspeople particularly in the SMEs. The senior lawmaker commended as timely and dynamic the response of the decision-makers to the crisis. She noted that the stimulus package would ease the supervisory restrictions on the local banks, thus enabling the private sector to retain the national workforce and continue the economic activities.

Announcing the package on Thursday, CBK Governor Dr Mohammad Al-Hashel said it would help minimize the risks posed to the private sector by COVID-19. Hashel said the package would reduce requirements for banks to provide financing for SMEs from 75 percent to 25 percent. He added that they it is also intended to boost the maximum lending limit and increase the maximum financing for residential real estate developments to the value of the property or the cost of development.

The package will support vital economic sectors and SMEs in their efforts to overcome the challenges of coronavirus pandemic, Hashel said, affirming that the Kuwaiti banking system enjoys a strong position. He added that the CBK would closely monitor banks to ensure meeting the targets of package and serving the interests of the national economy. - KUNA