The main condition for acquiring an industrial loan is that the project obtains an industrial license issued by the Public Authority for Industry.
Our Services
Industrial Loan
Industrial loans provided by the Industrial Bank of Kuwait are medium or long-term loans aimed at supporting industrial projects, marine and oil field service sectors and any other industrial supportive services at a subsidized interest rate of 3.5% annually.
Types of Projects Financed
- New industrial projects (Green Field)
- All types of expansion projects (addition of a product, increase in production capacity, transfer to new premises, replacement of depreciated assets, cost overrun, …etc.)
- Financial restructuring for industrial companies
- Purchase of existing projects (Acquisition)
Industrial Loan Conditions
Industrial license
Availability of land
A minimum size of the industrial plot of land should not be less than 1,000 m2.
Lending Limits
The amount of a loan should not be less than KD 100,000 and the financing percentage is specified as follows:
- New Projects: Up to 65% of project cost.
- Expansion projects: Up to 100% of project cost.
- Financial Restructuring for Industrial Companies: The limit shall be specified in accordance with the financial position of the customer and should comply with the objectives of the restructuring aim to support the financial position and performance of the customer.
- Purchase of existing projects (acquisition) excluding the land value: Up to 65% of project cost for new project, and up to 100% for expansion projects.
Used assets (machines/equipment, mobile equipment & vehicle) to be financed by the bank are subject to a percentage of the asset's cost based on its useful life. The financing is conditional on the customer submitting a technical certificate presenting the technical condition along with the estimated useful life of the asset.
Repayment Period & Collaterals
Repayment Period:
The loan is repaid in semi-annual installments, within a period of not less than five years after the elapse of the grace period of a maximum of 24 months from the commercial production date of the project.
The loan repayment may also be in a monthly or quarterly installments depending on the project’s expected cash flow and as agreed upon with the bank.
Collaterals:
The primary collateral for the industrial loan is mortgage of the commercial establishment (all tangible and intangible assets) and the official (real estate) mortgage of the factory pertaining to the loan, whether the factory is a new project under implementation or an existing factory in the case of expansion projects.
Additional guarantees may also be taken from the customer until the loan is fully repaid as the bank deems appropriate, as follows:
- Mobile Chattel Mortgage for the project’s fixed and movable assets
- Registered Real Estate Mortgage
- Listed Securities / Shares
- Cash Deposit / Bank Guarantee
- Corporate/Personal Guarantee of the Main Owners or Persons that the Bank would Accept and is Convinced by their Financial Solvency
Finance in Accordance with Islamic Sharia’
Industrial Financing
The Industrial Financing Portfolio in Accordance with Islamic Sharia’ was established in year 2007 under the management of The Industrial Bank of Kuwait on behalf of the Government (Kuwait Investment Authority) to offer long term financing for individuals and companies working in industrial projects, oil and marine services projects, or industrial logistics services for a known profit of 3.5% added to the financing amount.
Types of Projects Financed
- New industrial projects (Green Field)
- All types of expansion projects (addition of a product, increase in production capacity, replacement of depreciated assets..etc.)
Types of Finance
The Industrial Financing Portfolio in Accordance with Islamic Sharia’ provides financing through Murabaha/Lease to Own & Istisna’a as explained below:
- Murabaha/Lease to Own: These types of financing are usually granted to purchase assets necessary for manufacturing, such as (but not limited to) machineries and equipment, internal and external means of transportation, and office furniture.
- Murabaha: The sale of goods at a price, which includes cost plus profit.
- Lease to Own: Leasing of production equipment and other fixed assets for a specific period in return for a rental fee, with the promise that these assets will be transferred to the client at the end of the leasing period.
- Istisna’a Financing: This financing is usually granted for constructing new industrial facilities, such as buildings and factories, or for expanding existing industrial facilities, such as repair and restoration/reconstruction of buildings.
Financing Conditions
Industrial License
- The main condition for acquiring an industrial finance is that the project obtains an industrial license issued by the Public Authority of Industry.
Size of the industrial plot of land
- A minimum size of the industrial plot of land should not be less than 1,000 m2.
Financing Limits
The minimum finance amount for financing any projects is KD 100,000 and the financing percentage will be specified as follows:
- New Projects: Up to 65% of project cost
- Expansion Projects: Up to 80% of project cost
Repayment Period & Collaterals
Repayment Period:
The finance is repaid in semi-annual installments, within a period of not less than five years after the elapse of the grace period of a maximum of 24 months from the commercial production date of the project.
The finance repayment may also be in a monthly, or quarterly installments depending on the project’s expected cash flow and as agreed upon with the Portfolio.
Collaterals:
The primary collateral for the industrial financing is mortgage of the commercial establishment (all tangible and intangible assets) and the official (real estate) mortgage of the factory pertaining to the finance, whether the factory is a new project under implementation or an existing factory in the case of expansion projects.
Additional guarantees may also be taken from the client until the finance is fully repaid as the Portfolio deems appropriate, as follows:
- Mobile Chattel Mortgage for project’s fixed and movable assets.
- Registered Real Estate Mortgage.
- Listed Securities / Shares
- Cash Deposit / Holding a Cash Amount from the Client’s Account with the Industrial Financing Portfolio.
- Bank Letter of Guarantee
- Corporate/Personal Guarantee of the Main Owners or Persons that the Bank would Accept and is Convinced by their Financial Solvency.
