Cinet to add defaulting entrepreneurs to credit database in SME Fund link-up
Access by local banks and credit companies to the records of defaulting customers listed on the Kuwait Credit Information Network Company (Cinet) is set to expand, with plans under way to add a new data field covering entrepreneurs who have defaulted on loans from the National Fund for the Care and Development of Small and Medium Enterprises.
Informed sources told Al-Rai that Cinet has revived discussions with officials at the SME Fund to approve technical linkage between the two entities. The proposed connection would allow the names of borrowing entrepreneurs to be added to Cinet’s database, enabling banks and all licensed credit providers to review their financing status when assessing loan applications — particularly in cases involving defaulting entrepreneurs whose salaries have been frozen.
The sources explained that, in return, officials at the Fund would be granted access to credit data and borrowing histories of applicants who have obtained financing from banks or finance companies. In cases involving multiple lenders, priority of repayment would be given to the government entity.
Unified Credit Profile
According to the sources, the anticipated linkage would consolidate all of an entrepreneur’s direct and indirect obligations into a single information tab on Cinet. This would display the client’s total commercial, consumer and housing liabilities.
Once the SME Fund resumes lending operations, any financing it provides would also be recorded, allowing both public and private lenders to conduct a comprehensive assessment of the client’s overall credit position, evaluate risk levels and make more reliable financing decisions based on verified data.
Lending Restrictions and Blacklists
The sources added that under the expected agreement, the SME Fund, banks and finance companies would be prohibited from granting loans to any client listed on their respective blacklists. Through Cynet, all participating entities would have access to detailed credit histories and behavioral summaries derived from data submitted by network subscribers.
They noted that earlier negotiations between Cinet and the SME Fund had pursued a similar objective, but failed to result in a final agreement. However, the current discussions reflect a stronger mutual understanding of the importance of activating the linkage.
Strengthening Credit Discipline
The renewed push aims to enhance the exchange of credit information and improve joint lending mechanisms, contributing to a more flexible and advanced regulatory environment for credit providers. The reliance on accurate data and robust credit analysis is seen as a key tool for early detection of financial risks.
The sources emphasized that linking Cinet with the SME Fund would help protect the financial system from excessive default risks, stressing that this responsibility cannot rest with one institution alone, but requires close coordination between public and private sector entities within a sustainable partnership framework.
Salary Ceiling Not a Barrier
Addressing questions over lending decisions, sources said that if Cinet data shows an applicant has reached the maximum allowable installment — capped at 40% of salary under regulations — this does not automatically disqualify the entrepreneur from obtaining financing from the Fund.
They clarified that the Fund’s credit evaluation criteria do not rely primarily on salary levels, even when salary assignment is permitted. Instead, lending decisions focus on the feasibility and economic value of the proposed project, particularly whether it operates in a value-added sector of the national economy, demonstrates commercial viability, and offers promising future growth.
Regulatory Framework
Cinet remains Kuwait’s sole licensed provider of credit information and credit ratings. Its activities are subject to the supervision and oversight of the Central Bank of Kuwait, and it operates in accordance with Law No. 9 of 2019, which regulates the exchange of credit information.
