October 6, 2020 banking

Banks are going after expat loan defaulters in their countries


Expatriates will not have their loans waived off as bad debts despite the expiration of their residency visas and being unable to return to the country. Some banks have resorted to prosecuting defaulting clients abroad and their sponsors at home, with the help of recovery agents/companies who at their behest are working on persuading the clients to pay or negotiate, and respond to creditor banks, Al Rai daily reported. An increasing number of expatriates are stranded outside Kuwait due to the anti-coronavirus health measures, and as their residency visas have not been renewed, their status is expired. A ban on 34 countries from where expats are unable to enter Kuwait was initiated as a preventative measure against the coronavirus.

The banks are starting procedures for the prosecution to go after these expats even if the loan is KD50 dinars and depending on the financing amount, the daily said, quoting sources, explaining banks will also start freezing assets if they are found while leaving the door for settlements open. The banks will start assessing the accounts next month to determine the extent of the defaulted loans.

The loans on expat borrowers does not constitute a large part in the financing portfolios, in terms of value, as the loan limit for the majority of expatriates is specific, often directed to consumer spending, which reduces banking concerns regarding liability. Expats are unable to obtain full loan facilities, as they usually do not meet the specified conditions, at least in terms of salary.

Those expats stranded abroad on expired residences, or at risk of expiry, are those in the following professions, including teaching, engineering, and medical staff, as well as those in medium-sized enterprises such as freelancers.

timeskuwait



Top News



banking

Expats take out over 4 billion Kuwaiti d...
October 20, 2020
GCC banks face further profit drop
October 17, 2020
Ekata Introduces Account Opening API
October 16, 2020