Traditionally, Kuwait banks offer the full range of financial services needed to conduct commercial transactions or develop projects in the State of Kuwait. Letters of Credit (LCs) are traditional instruments for private-sector transactions. LCs may be confirmed by a bank in the exporter’s country for additional exporter assurance. The exporters develop longer-term relationships and there is greater trust in the credit-worthiness of all parties, companies may be willing to accept documents against payment (d/p) or documents against acceptance (d/a). Deferred payment schedules are not common except in cases of large transactions where supplier financing plays a role.
How Does the Banking System
There are three specialized government-owned banks providing medium and long-term financing. The Industrial Bank of Kuwait offers financing for industrial and agricultural related projects. The Kuwait Real Estate Bank offers financing of residential and commercial property developments. The Credit and Savings Bank acts as a type of loan agency for the purchase of single-family or multi-family residential units.