Acting Group Deputy General Manager -Products at Kuwait Finance House (KFH), Nehal AlMosalem emphasized the significance of educating customers and the public about various banking services and products provided to them as she believes in the importance of enhancing financial education for different society categories and achieving the best benefits from banking products and services.
To enhance public awareness on all types of personal finance operations, Almosalem added that finance transactions comprise two types: consumer finance which covers personal needs e.g., purchase of cars, furniture or acquiring beneficiary services such as educational and health services as well as other consumer purposes. The second type covers residential needs e.g., purchase, build or renovate private residence.
She stated in a press release, as part of supporting the banking awareness campaign "Diraya", that consumer finance is a 5-year mid-term personal finance not exceeding KD 25,000/-. Housing finance is a long-term personal finance for a maximum 15-year period and a cost not exceeding KD 70,000.
Almosalem added that to regulate the provision of personal credit facilities in a way that enables the customer to benefit from such facilities without being exposed to default risk, and to avoid burdening the customer with financial obligations, the Central Bank of Kuwait has enacted a set of controls that banks must adhere to when providing finance, whether for employees or retirees, considering the financial conditions of each of these two categories. She indicated that total monthly financial obligations shall not exceed 40% of the customer's net monthly salary for employees or 30% for retirees.
She highlighted the bank's role in providing financial advice regarding customer's needs and obligations and the risks of the increased financial obligations, providing all the information about the finance contract, clarifying the details of the finance process, e.g. rate of return/discount rate to the finance amount, number of installments, details of each installment and other information before signing the contract with the customer. In addition, the bank should give the customer a period of two days to review the contract and read the terms and conditions carefully, so that the customer would be aware of his rights and obligations under the contract before signing it.
KFH continues its endeavor to support "Diraya" campaign which was launched based on the Central Bank of Kuwait initiative in cooperation with the Kuwait Banking Union.
The campaign "Diraya" aims to spread awareness concerning customer's rights in personal finance operations, the mechanism to file complaints concerning banking services and diversified banking cards, the methods to avoid being exposed to fraud operations and spread awareness on the risks of encashments and high-risk investments. Also, it aims to highlight the banking sector role in general, and the banking products provided by the private sector, by introducing a set of instructions and information on regular basis through social media and various e-channels of the bank.