SMEs development fund draws list of non-performing projects
Fatwa dept’s opinion taken into consideration
KUWAIT CITY, Oct 7: The Board of Directors of the National Fund for the Welfare and Development of Small and Medium Enterprises (SMEs) has prepared a draft of the list of non-performing projects, reports Al-Rai daily.
The daily said the opinion of the Fatwa and Legislation Department regarding the proposed regulation and its observations have been taken into consideration.
Related sources pointed out according to the draft, the project is considered to be in default in 9 cases, including if the initiator fails to pay the financial dues of his clients – companies and traders – for two consecutive months, and also if the defaulter sells some fixed assets to obtain liquidity, saying the Board of Directors has the right to issue decisions entrusted to it.
The project may be managed by a specialized company under its supervision for the name and account of the initiator.
The sources explained that the Director General of the Fund may submit a proposal to the Board of Directors to liquidate the project and take other appropriate measures in many cases, most notably if the losses of the initiative amount to 3 quarters of the value of the fund plus the value of the share of the project owner.
The project is considered a default in the following cases: if the project owner ceases to repay the installments of the loans due to him on the due date for repayment for a period that may harm the project; if the financial statements submitted by the project owner show that his financial position is unsound; if a court verdict is issued declaring bankruptcy; if the owner stops practicing the activity; if he fails to pay the financial dues of his clients (companies and traders) for two consecutive months.
This is in addition to selling some fixed assets to obtain liquidity; if the project is late in meeting its obligations; in the event of successive losses; other cases where the project is considered to be in default may be added by a decision of the Board of Directors after the presentation of the Director General.