In reply to a query in parliament, the Minister of Finance Dr.Nayef Al-Hajraf has confirmed that non-performing loans in Kuwait banks were among the lowest in the world.
Quoting from figures provided by the Central Bank of Kuwait, the finance minister said that non-performing loans (NPL) amounted to less than two percent of the total consumer and housing loan portfolio among banks in the country.
He pointed out that regular repayment of loans constituted more than 98 percent of loans taken out in Kuwait, and that legal actions against defaulters constituted just one percent of the total loans availed by citizens.
The minister added that the low level of delay or default in loans could be attributed to the verification of loan applications by banks, in accordance with the strict and prudent criteria outlined by the Central Bank, and confirmed the strength of borrowers to repay their debts.”
He made clear that before issuing any loan the bank ascertains that the process is fully transparent and that the citizen has the financial capacity and wherewithal to make regular loan repayments throughout the loan period.
Moreover, the Central Bank conducts regular independent external audit of the procedures for granting these loans and that banks are complying 100 percent with the Central Bank’s directives on loan disbursement. On the other hand, the minister pointed out that the Central Bank’s Consumer Protection Guide includes numerous controls designed to protect the rights of customers in a balanced relationship with the banking sector.