21 March 2021
In support of the ‘Let’s be Aware’ campaign initiated by Central Bank of Kuwait and Kuwait Banking Association, in cooperation with local banks, Al Ahli Bank of Kuwait stressed on the understanding of bank loans and the borrowing process to help enhance the level of financial literacy amongst the general public.
Mr. Ali Al Sammak, AGM Retail Banking at ABK, commented, “The ‘Let’s Be Aware’ campaign is a much-needed initiative that ABK is proud to be a part of. It aims to enlighten consumers to better understand financial products and services available to them, as well as their responsibilities when they avail these products and the bank’s responsibilities towards them when applying for the loans.’’
Speaking on the importance of understanding the types of loans, Mr. Al Sammak added: “It is important that customers fully understand the two main types of loans available to them, namely consumer loans and housing loans. It is as important to know how much they are eligible to borrow; the repayment terms of a loan and the repayment periods. A consumer loan is a medium - term personal loan available over five years, up to a maximum of KD 25 000 and the loan amount may not exceed 25 times the borrower’s salary. This type of loan is for financing goods and services such as buying cars, furniture, education or health services. A housing loan is a long term loan up to a maximum of KD 70 000, valid only for the purchase, building or renovation of a private house, payable over a 15 year period. Monthly instalments should not exceed 40% of their income for working individuals and 30% for retired individuals.”
Central Bank of Kuwait has set specific policies and instructions for the borrowing process. Banks and financing companies must provide customers with loan details including the number of instalments, payment dates, the value of the number of instalments, the ratio of the instalment to the net salary, as well as the consequences of non-payment. Customers are entitled to obtain a deadline of at least two days to review the contract before signing it. Customers can also obtain a draft signed contract which includes details such as the type of loan, the repayment period, the amount of the instalment and the interest. Al Sammak added: “These are extremely important steps that ensure customers are aware of their rights and obligations before signing a contract.”
Central Bank of Kuwait’s instructions also include the importance for Banks and financial institutions to provide financial advice for customers before and during financing and clarifying the risks of increasing financial obligations especially in the event of a change in career or retirement.
The ‘Let’s Be Aware’ campaign is scheduled to run throughout 2021, and will continue to spearhead the dissemination of key information on topics including but not limited to, filing of complaints, ensuring availability of special needs services, fraud management, as well as investments and savings information.
For more information, please follow the campaign on Instagram and Twitter accounts at @dirayakw or visit the campaign’s official website at www.dirayakw.com.
For more information kindly visit eahli.com or contact an ABK customer service agent via ‘Ahlan Ahli’ at 1899899.