Kuwaiti Lawmakers Draft Bills to Bail Out Indebted Citizens
Kuwaiti lawmakers in the Gulf state’s newly elected parliament are pushing for a government bailout of households that have accumulated billions of dollars of debt.
Three lawmakers have submitted draft bills this week to help Kuwaitis repay loans. One of them, lawyer Nawaf Al-Fuzaie, said he has been fighting in court to relieve Kuwaitis of the burden of “illegal interest” and is now taking the battle to parliament.
“We’re looking for a solution to help solve this issue and we’re open to suggestions,” Al-Fuzaie said in a phone interview today. “We’re talking about 1.8 billion dinars ($6.4 billion).” Al-Fuzaie said he is confident of the support of a majority of lawmakers.
Previous attempts at passing such a law have failed. In 2010, the government refused to endorse a bill that would have cost the state about $23 billion to buy personal loans and write off accumulated interest. The government said at the time the measure was unconstitutional and threatened the stability of Kuwait’s banking system. Al-Jarida newspaper today cited Finance Minister Mustafa Al-Shimali as saying that the government has no intention of supporting such proposals.
Al-Fuzaie said his bill, which would apply to Kuwaitis with loans of 70,000 dinars or less, will help companies and the economy. Proposals submitted by two other lawmakers call for scrapping interest on loans and rescheduling payments.
In 2007, the government set up a fund to help retail borrowers repay their loans. Central Bank Governor Mohammed Al- Hashel said in October that about 26,000 Kuwaitis who had registered with the fund had received interest-free loans of 420 million dinars, adding that he was opposed to scrapping the interest on citizens’ debts.
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