Kuwait set to permit banks to offer mortgages for the first time

Investing.com -- Kuwait is on the verge of letting banks provide mortgages for the first time, a move that is expected to significantly alter the nation’s financial scene. The legislation allowing this change is anticipated to be passed soon by the Council of Ministers, according to a Bloomberg report on Friday.

This decision could open up a market that might reach a value of $65 billion, suggesting a 40% growth in lenders’ credit portfolios.

Historically, mortgages were neither permitted nor regulated in Kuwait due to concerns over the political fallout from seizing citizen-owned homes. Instead, the government offered a public housing program, providing married citizens with a heavily subsidized house or a plot along with a low-interest loan.

However, this system has been under significant strain due to a backlog of 103,000 requests. The slow pace of handovers indicated that citizens could wait up to a decade to receive their homes. This situation has led the government to consider major changes to the housing program.

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