In the first ten months of 2023, local banks have experienced a notable decline in the monthly financing they extend to the industrial sector, marking a significant 32.4 percent decrease from the corresponding period in 2022. The total monthly financing dropped from 1.359 billion dinars in 2022 to 918.7 million dinars in 2023. Insights from the Central Bank of Kuwait’s October statistics reveal a monthly upswing of 32.6 percent, with financing reaching 18.5 million dinars. However, this figure depicts a substantial 52.3 percent year-on-year reduction from 157.9 million dinars in October 2022.
Examining the trajectory of financing within the industrial sector, February 2022 saw the pinnacle with financing exceeding 414 million dinars. In contrast, the sector witnessed its lowest point in September 2023, with financing reaching approximately 56.8 million dinars. This decline in financing to the industrial sector coincides with a reduction in new monthly credit facilities, aggregated over ten months, by 1.8 percent.
The total credit facilities dwindled from 19.28 billion dinars in 2022 to 18.921 billion in 2023. However, every month, credit facilities surged by 36.2 percent, totaling 1.875 billion dinars in October, up from 1.376 billion dinars in September. The accumulated balance of industrial financing provided by local banks witnessed a 5.7 percent annual dip, totaling 167.6 million dinars.
This decline is evident when comparing October 2022’s figure of 2.922 billion dinars to October 2023’s reduced balance of 2.754 billion dinars. While this balance decreased by 2.2 percent and approximately 61.9 million dinars compared to December 2022, it increased monthly by 0.4 percent, amounting to 11.6 million dinars. This positive shift came after registering 2.743 billion dinars in September. In contrast, the total cash credit facilities provided by banks across all sectors showcased a growth of 1.3 percent during the initial ten months of 2023, amounting to 677.9 million dinars.
Monthly, this figure increased by 0.5 percent, reaching approximately 296.2 million dinars in October, up from 52.828 billion dinars at the end of September. On an annual basis, the total cash credit facilities increased by about 998.6 million dinars, surpassing 52.126 billion dinars in October 2022. The industrial sector has faced a multitude of challenges over the last three years, emerging as one of the main sectors adversely affected by the COVID-19 pandemic. The imposition of bans and the suspension of corporate activities, coupled with disruptions in the supply and production chain, has led to significant setbacks for the industrial sector. Additionally, the sector has suffered from reduced demand and limited new projects within the country. These multifaceted challenges have had a substantial impact on local industrial projects, clearly reflected in the decline in funding received by the sector during the initial ten months of 2023 compared to the same period last year.
Source:https://www.arabtimesonline.com/news/kuwait-banks-financing-of-the-industrial-sector-declined-in-1st-10-months-of-23/