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Kuwait’s household credit picks up in Q3 2021

Business Kuwait City 19 Nov 21
Kuwait’s household credit picks up in Q3 2021
Domestic credit growth picked up to 2.1 percent q/q in Q3, 2021 with the y/y increase at 4 percent through September.
Event Location
Kuwait, Kuwait
Kuwait City
Start Time
19 November 2021, 12:00 AM
End Time
30 November 2021, 12:00 AM

For the fifth consecutive quarter, household lending was the main growth driver, while business lending has been slow to recover from the pandemic-related slowdown.

Household credit accelerated to register the fastest quarterly growth since the third quarter of last year, with the y/y increase at 11.2 percent through September. This strong expansion was driven by housing loans as well as personal consumption loans with both growing at around 11 percent y/y.

The household credit growth will likely start to trend down to pre-pandemic levels following the Q4 expiry of the six-month deferral of household credit installments of Kuwaiti borrowers.

Business credit was flat in 3Q2021 with the y/y increase at only 0.3 percent through September.

While the pandemic-induced shock continues to put pressure on the growth in business credit, relatively high repayments/write-offs are also a likely factor for the weak business credit trends over the past year.

Nevertheless, the various sectors showed wide differences with the trade and construction sectors continuing to be the weakest, falling by 13 percent and 11 percent y/y, respectively. In contrast, credit growth in the oil/gas (+14 percent y/y) and industry (+11 percent) sectors was very robust. Credit to real estate, by far the largest component of business credit with a 43 percent share, continued to gradually inch up with the y/y increase at 2.3 percent through September.

Business credit should be supported by a likely improvement in project awards and by the pent-up demand for capital spending (CAPEX) given muted CAPEX by corporates since the outbreak of the pandemic.

Kuwait Household credit growth 2021Kuwait banking news 2021

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