Supervisory instructions to the banking sector led to banks ceasing to grant expats installment loans up to KD 70,000, limiting their financial transactions to car loans and some consumer needs, although there are no specific supervisory instructions in this regard. Instructions by the Central Bank set the maximum limit of consumer loans at 15 times the salary, but should not exceed KD 15,000, and the total installments should not exceed 40 percent of the salary. Meanwhile, an installment loan may reach KD 70,000 and has to be paid back in 15 years.
Banking sources said supervisory instructions and banking policies do not differentiate between citizens and expats, but “installment loans” are exclusively for private residences in Kuwait including constructing, renovation and purchase, and cannot be used for trading in residential real estate or development for investment purposes.
Banks used to grant installment loans to expats and they used the amount as they liked with a commitment to pay it back, and this was possible because the client was not required to present any invoices or proof for the money was used for. But starting from October, the customer had to submit invoices within six months, so some banks stopped granting installment loans to expats.