The State will have to bear 600 million KD for late payment of loan maturities – ARAB TIMES
450,000 citizens will benefit from a postponement decision
KUWAIT CITY, April 1: The cost to the state budget for implementing the decision to delay loan payments by six months, and for supporting and securing funding for entrepreneurs affected by the COVID crisis -19 is around 600 million KD, but with the assumption that the state would bear the cost of some owners of small and medium-sized businesses who do not repay the funding they will receive in the future, reports the daily Al -Rai citing banking industry sources. They explained that the number of citizens who will benefit from the deferral of loan payments from banks and finance companies is around 450,000, with a value of up to 340 million KD which will be fully supported by the public treasury. . The cost of supporting credit entrepreneurs is expected to reach around KD 40 million, of which it is spent quarterly during the period of the law. The potential cost of default is close to KD 200 million, including the proceeds of guarantee fees
The decision to defer payments only concerns citizens and does not apply to expatriates and residents of Bedoun. The beneficiary segment includes borrowers from banks and finance companies, the fund allocated to help failed entrepreneurs, the Family Support Fund, the Public Social Security Institution, the Credit Bank of Kuwait and the Public Authority. for the protection of housing.
The total cost of deferring loans owed to the state is likely to amount to KD 376 million. The sources said they expect banks to resort to the measures they applied in the previous deferral of disbursements, as all citizens’ disbursements should be automatically postponed except for those who submit a payment. request indicating that they do not wish to postpone.
While banks and finance companies acquire the greatest value of the cost of deferral of loans, with a share of KD 340 million, the government agencies share of the cost of deferral is KD 36 million, split from 19, KD 5 million for deferral of replacement payments, KD 10.32 million for installments, KD 5.05 million for contributions from owners of private and petroleum sector business owners not owned by the state, KD 1.15 million for contributions from chapter five insureds and KD 0.11 million for payments by defaulters and family support funds.