Kuwait tightens lending criteria for expatriates amid job security concerns

Dubai: Kuwaiti banks are tightening lending criteria for expatriates as concerns over job security, Kuwaitisation and potential contract terminations prompt lenders to take a more selective approach to credit, banking sector sources said.

The shift does not amount to a suspension of lending to expatriates, but banks are increasingly assessing whether borrowers’ jobs are likely to remain secure throughout the repayment period.

Government positions affected by Kuwaitisation, jobs considered surplus and occupations facing restructuring are receiving greater scrutiny. These include some government school teachers in specialisations affected by surplus staffing plans, as well as employees of cooperative societies and public benefit organisations.

Banks remain willing to lend to expatriates in professions considered relatively secure, including doctors, engineers, healthcare professionals, technicians and employees in technology and artificial intelligence. Teachers in specialisations not considered vulnerable to Kuwaitisation also remain eligible.

Length of service, salary, credit history and end-of-service benefits are increasingly important. Employees with around 10 years or more of service may be viewed as lower-risk borrowers because accumulated end-of-service benefits can provide additional security.

Newly appointed workers and employees with lower educational qualifications face tighter conditions and potentially lower credit limits.

Eligible Kuwaiti and expatriate borrowers can obtain combined consumer and housing financing of up to KD95,000, subject to regulatory and bank requirements. A KD95,000 facility would require a salary of about KD2,750, with an estimated KD1,100 monthly instalment, equivalent to 40 per cent of net salary. A KD25,000 loan would require a salary of about KD1,225, with an estimated KD490 instalment.

Banks are also scrutinising employers’ financial strength, reputation and record of salary payments. Employees of companies listed on Boursa Kuwait or employers already approved by a lender may receive more favourable consideration.

Expected Kuwaitisation is also influencing repayment periods. Judges retain strong credit ratings, but planned Kuwaitisation of the judiciary by the end of 2030 could result in loan terms being aligned with the anticipated replacement timetable.

High-value expatriate customers with substantial deposits, assets or end-of-service benefits continue to receive preferential treatment, including potentially higher financing limits and competitive rates.