Kuwait Credit Bank weighs issue of 1 bln dinars of bonds amid liquidity crunch

KUWAIT, Jan 31 (Reuters) – Kuwait Credit Bank, a state-owned lender that provides interest-free home loans, is in talks with banks and Oliver Wyman over issuing a possible one billion dinar ($3.30 billion) dollars) of bonds, said its chief executive. noted.

No decision has been made and the KCB is also considering issuing sukuk or taking out bank loans to fund a long-running cash crunch amid growing demand for its 70,000 dinar interest-free home loans, it said. Salah al-Mudhaf to Reuters.

He said KCB needed 16 billion dinars to fund home loans until 2035. Kuwait’s parliament last week approved a measure to provide KCB with 300 million dinars from the Kuwait Fund for Arab Economic Development to to increase its capital and reschedule 500 million dinars in bonds due to KFAD.

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The government of Kuwait guarantees housing for its citizens, who number about 1.47 million and make up about one-third of the population, by providing free land and funding from KCB.

Kuwait has about 100,000 outstanding orders for homes, which KCB would likely fund in part, and a 17-year backlog amid cash shortages at KCB.

“The situation today is not stable. There is no stability and there is no possibility for (the bank) to continue providing loans in this way in the long term,” al said. -Mudhaf to Reuters.

“The habitat philosophy must be rethought to develop sustainable solutions.”

Neighboring countries guarantee their low-income citizens the right to housing, Mudhaf said, “while in Kuwait everyone takes whether they are low-income, middle-income or high-income people. “.

He later clarified that he did not mean that only low-income Kuwaitis should be guaranteed housing, but that beneficiaries should be categorized.

($1 = 0.3027 Kuwaiti dinars)

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Written by Yousef Saba; Editing by Kirsten Donovan

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