14/10/2024
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14/10/2024
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KUWAIT CITY, Oct 14: Kuwait’s personal finance and lending sector has experienced substantial growth in recent years, with the percentage of borrowers from commercial banks steadily increasing. Official data from 2015 to 2023 shows that 23% of the country’s population now holds loans, reflecting a growing reliance on bank financing as economic activity expands.
According to data from the Central Bank of Kuwait’s Financial Services Access Survey, by the end of 2023, 230 out of every 1,000 people in Kuwait were borrowers, equating to 23 borrowers for every 100 individuals. This marks a consistent rise from a low point in 2020 during the COVID-19 pandemic when the percentage of borrowers dropped to 20.9%. Since then, loan uptake has steadily rebounded, driven by economic recovery and an increased demand for personal, residential, and investment financing.
The data, analyzed by *Al-Anba*, revealed that in 2016, 21.7% of the population had loans. This figure has risen over the years, reaching 23% by 2023. The growing number of borrowers signals increasing confidence in Kuwait’s financial and banking systems, bolstered by the country's relative economic stability and expanding investment opportunities.
Post-Pandemic Recovery
The study highlights 2021 as a pivotal year, with a surge in borrowing as the economy recovered from the pandemic. That year saw the borrower rate climb to 21.67%, indicating a renewed demand for financing after the economic slowdown caused by COVID-19.
Increase in Depositors
In parallel, the number of depositors in Kuwait's commercial banks has also surged from 2015 to 2023, demonstrating a strong culture of saving among both citizens and residents. On average, there are 1,440 deposits for every 1,000 people in Kuwait, indicating a widespread commitment to saving.
Bank Branches and Digital Services
The number of bank branches in Kuwait has remained relatively stable, despite slight fluctuations from 2015 to 2023. The total number of branches stood at 403 by the end of 2023, a slight decrease from the peak of 411 in 2018. The drop in branches during the COVID-19 pandemic, when many banks temporarily closed or merged operations, has since been followed by a gradual recovery.
As digital banking services continue to grow, there has been a shift in customer preferences toward online services. This trend has prompted banks to reorganize their operations, with some reducing the number of physical branches while enhancing their digital offerings.
ATM Network and Digital Transformation
The use of ATMs in Kuwait has evolved significantly between 2015 and 2023, with approximately 67 ATMs per 100,000 adults in operation by the end of 2023. Although reliance on ATMs has decreased with the rise of digital banking services and electronic payments, banks have continued to enhance ATM functionalities, offering services such as bill payments and money transfers.
ATMs remain a key component of Kuwait's banking infrastructure, although their numbers may gradually decrease in areas with strong digital banking penetration. However, they are expected to offer more advanced services as customer needs evolve.
Looking Ahead
As Kuwait’s economy continues to grow, the demand for personal financing is projected to rise. The government’s ongoing support for small and medium enterprises (SMEs) and the expansion of personal financing options are expected to further drive this upward trend. Additionally, improvements in digital banking services will make loans more accessible, reinforcing the country’s reliance on bank financing.
With continued economic stability and technological advancements, Kuwait's personal lending and banking sector is set for further growth in the coming years.
