Kuwaiti MPs will this week debate a motion to write-off the interest accrued on Kuwaitis’ loans from local banks taken out prior to the global financial crisis, estimated to cost the government US$6bn.
Under a draft law already approved, the government will purchase loans taken out prior to April 1 2008, and then reschedule the repayments while writing off the interest.
The proposal could affect tens of thousands of Kuwaitis.
The Kuwait Central Bank estimated the move would cost KWD1.7bn.
However, the legislation is yet to be fully approved after some MPs said it was unfair to Kuwaitis who were not affected by the financial crisis.
In a compromise, they suggested the government also pay KWD1,000 to every Kuwaiti who would not benefit from interest write-off.