Kuwait Banks Restrict Expat Loans After Mass Teacher Layoffs
Kuwaiti banks have started using an internal grey list to mark certain expat jobs as high-risk for loans, according to banking sources on September 15, 2026. This new rule comes after the Ministry of Education fired 7,019 expat teachers, including 1,551 men and 5,468 women, to fix a surplus of 33,268 staff. These job cuts, announced from September 7 to 8, will save about KD 42 million every year.
- Expat teachers and workers face tougher rules to get personal and housing loans.
- Banks now look at job security, employer payment records, and years of service.
- New loan limits and salary rules apply across banks.
Impact on Expat Borrowers
For expats from India, Pakistan, Egypt, Bangladesh, and other South Asian nations, this development signals tightened access to personal and housing loans. Financial institutions are shifting their evaluation criteria beyond salary and credit history to consider job security regarding Kuwaitization, employer salary-payment records, and length of service. Preference is given to employees with over 10 years of tenure and those at companies listed on the Kuwait Stock Exchange.
New Loan Rules and Limits
Lending thresholds have been adjusted, with some banks mandating minimum monthly salaries between KD 400 and KD 600. While combined consumer and housing finance remains available up to KD 95,000, monthly installments are strictly capped at 40% of an applicant's net salary. For instance, a KD 1,100 installment requires a minimum monthly salary of KD 2,750. To secure loans, some banks are now requiring employers to provide written undertakings to transfer end-of-service payments to the bank should an employee be terminated before the loan is fully repaid.
Affected Professions and Advice
While doctors, engineers, healthcare staff, and AI specialists continue to access financing, those facing increased scrutiny include government teachers in surplus subjects such as physical education and Islamic education, newly hired staff, and employees of co-operative societies. The recent education-sector dismissals, communicated via the Sahel app as Contract Termination Notice, represent the largest such reduction in Kuwaiti history. Expatriates are advised to prioritize long-term employment with stable, listed firms and ensure their service entitlements are well-documented to mitigate the impact of these new banking constraints.