A report prepared by the Financial Affairs Committee of the National Assembly on the loan purchase law has been submitted to the National Assembly for review and necessary action.
In the meantime, according to a local Arabic daily, the Central Bank of Kuwait commenting on the report said there are 515,000 people who have borrowed a total of 14.6 billion Kuwaiti dinars from banks, and the default rate in paying installments on loans is about 2.5 percent, and the rate of discipline in repayment is high.
The CBK said, according to the committee’s report, that repaying loans from the state’s general reserve is neither possible nor feasible due to the high cost and the lack of liquidity in the general reserve.
The bank indicated that the second hypothesis for dealing with the proposal is to repay the loans by borrowing from the state at an interest rate of 5% on the total loans, and the payment is to be made in monthly installment of 98 million dinars within 20 years, while the citizens who are borrowers will pay the remainder of the loan — the principal debt without interest to the state in monthly payments of 120 dinars, indicating that this will extend the repayment period to 81 years.
The bank added, “It is not possible to work with the second hypothesis, especially since the public debt tool remains suspended because the draft law was not approved to authorize public loans and financing operations from the local and global markets.”
The committee decided that the state would buy citizens’ loans due until December 1, 2022 and waive their interest from citizens, provided that the repayment takes place after a year of grace period and in monthly payments.