Kuwait considers finance reform

28 November 2016

Laws under review include bankruptcy, credit checks

The Kuwaiti government is considering four draft laws around creditor rights and insolvency, according to Firas Raad, Kuwait country manager at the World Bank, speaking at MEED’s Kuwait Projects conference on 28 November.

They will cover credit checks, bankruptcy legislation and secured transactions.

“Secured transactions allow medium-sized companies to borrow more and use non-moveable assets as security,” says Raad. “Reforms on credit checks would set up credit registry, and a modern credit infrastructure, which Kuwait doesn’t have. An insolvency law would allow investors to liquidate assets if need be, and the plans include specialised courts.”

This would promote investment by allowing investors to enter and leave the market more easily. It would also de-risk projects by allowing a variety of structures, helping investors to finance them.

Competition laws, including in the telecommunications sector, are also in the works.

Kuwait’s National Assembly recently passed a new procurement law following a World Bank study, which should speed up the process. This should also improve investor confidence.

“This replaces one of oldest laws,” says Raad. “It is now quite modern, and covers procurement planning, bidding, contract administration. It also establishes organisational arrangements for centralised and decentralised procurement, introduces e-procurement and increases transparency and accountability.”

Other reform programmes include improving conditions for small and medium enterprises.

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