KUWAIT CITY, Nov 3: The local banks in Kuwait reported a substantial increase in financing for the construction sector, reaching 467.9 million dinars in September, up by 186.4 million dinars or 66.2 percent from August’s figure of 281.5 million dinars, reports Al-Seyassah daily. On an annual basis, financing soared by 270 million dinars, marking a 136.4 percent increase compared to September 2023, when it was 197.9 million dinars. Over the first nine months of 2024, total financing to the construction sector amounted to approximately 2.473 billion dinars. According to the Central Bank of Kuwait’s monthly statistics, the cumulative balance of construction financing provided by local banks rose to 3.051 billion dinars in September, an increase of 1.6 percent (49 million dinars) from the previous month’s balance of 3.002 billion dinars.

This balance also reflected an annual increase of 524 million dinars, or 20.7 percent, from 2.527 billion dinars in September 2023. Throughout 2023, local banks provided a total of 1.754 billion dinars in construction financing, a slight increase of 0.7 percent (14 million dinars) from 1.740 billion dinars in 2022. The financing levels fluctuated throughout 2024, with figures ranging from 156.8 million dinars in January to 467.9 million dinars in September. Despite the rise in financing, the construction sector faces several challenges, including a decline in project launches and contract signings over the past five years, delays in contractor payments, and rising construction costs due to labor shortages. Real estate experts note that not only is there a lack of quantity in labor, but quality has also been impacted by the departure of experienced workers following the Covid-19 pandemic.

Additionally, local banks granted new loans totaling 2.27 billion dinars to residents and nonresidents in the first nine months of 2024, bringing the cumulative balance of credit facilities to 55.83 billion dinars as of September, representing a growth rate of 4.2 percent from December 2023, when it was 53.55 billion dinars. As of the end of September, loans granted to residents in Kuwait reached 48.86 billion dinars, reflecting an increase of 1.18 billion dinars, or 2.5 percent, over the first nine months of 2024, compared to 47.67 billion dinars at the end of December 2023.

Loans extended to non-residents amounted to 6.97 billion dinars, with a notable growth of 1.09 billion dinars, or 18.6 percent, from the December 2023 figure of 5.88 billion dinars. This increase in loan volume for both residents and non-residents aligns with an overall growth in credit across various economic sectors. Notably, housing loans -- long-term personal loans with a maximum duration of 15 years provided for purchasing, building, or renovating private residences -- totaled 16.32 billion dinars by the end of September, representing a rise of 312 million dinars, or 1.9 percent, from 16 billion dinars at the end of December 2023.

Additionally, the total consumer facilities extended in Kuwait during the first nine months amounted to approximately 82 million dinars, reflecting a growth of 4.1 percent and bringing the cumulative balance to 2.05 billion dinars, up from 1.96 billion dinars at the end of December. The overall balance of personal facilities stood at 19.12 billion dinars by the end of September, indicating continued demand for credit in the market.

By Mahmoud Shendi

Al-Seyassah/Arab Times Staff