Kuwait Banks Set Stricter Rules for Expat Loan Approval

Kuwaiti banks are refining their lending preferences for expatriates, emphasizing stable sectors like education and healthcare. The updated criteria now prominently feature professionals in these fields, such as doctors, nurses, and technicians, along with individuals holding elite positions where competence is crucial.

Strategic Shift Towards High-Quality Credit Records

Banking sources indicate a strategic shift towards customers with high-quality credit records and substantial end-of-service benefits. The focus is on individuals with stable jobs, with a reluctance to grant loans to newly appointed expatriates. Consumer loans for non-Kuwaitis earning around 1,250 dinars with over 10 years of continuous service are capped at 25,000 dinars.

Selectivity and Limitations

The banking policy reflects a growing preference for low-risk ventures, resulting in selectivity, particularly concerning newly appointed expatriates and employees over 55 years old with low salaries and non-university educational certificates.

Decline in Loans to Expatriates in Government Sector

There has been a notable decline in loans to expatriates in the government sector over the past year. Banks attribute this to reduced non-Kuwaiti appointments in government jobs in 2023 and the prioritization of appointments for citizens.

Banks Open to Financing Expatriates

Approximately 4 out of 10 banks are more open to financing expatriates on favorable terms, capitalizing on the limited credit space for Kuwaitis. These banks are willing to wait for customers to switch banks, as required by the Central Bank after 30 percent of the repayment period has passed.

Alternative Lending for Banks Seeking Market Share

For banks struggling to gain market share in the Kuwaiti retail sector due to intense competition, lending to expatriates becomes a viable alternative. Market studies indicating a manageable default rate among expatriates drive these banks to expand their lending portfolios, maintaining general principles for good individual lending while adopting protective measures.