In Albania, it seems to be easier to obtain a loan than in other countries of the region. The Bank of Albania confirms that this year, lending in Albania has grown, while in other countries of the region, it has slowed down. According to the data provided by BoA, individual loans in Albania have seen a growth thanks fewer requirements, but at the same time, thanks to a growth in demand too. “Meanwhile, growth rates for the business sector have remained modest”, central bank experts say. On the other hand, in the countries of Central and Southeast Europe, lending has been fluctuating throughout the year. “A similar trend has also been noticed in the Balkan region. Business loan growth has also been moderate”, experts say, stressing that lending for the business sector in the region registered an annual average growth of only 2.7% in the month of October and November compared to 3.5% in the previous quarter. Experts also explain that “the slowdown of lending in Central Europe has been mainly driven by loan performance in the Czech Republic, while Poland and Hungary have registered sustainable growth rates.” “Meanwhile, in the Balkans, the growth rate has been more restrained, especially in countries such as Bulgaria and Romania”, experts also say. In countries such as Croatia and Serbia, business loans have been shrinking. But, this is not the case in Albania, despite the low levels of lending for this category. On the other hand, individual loans in the region have also registered a positive performance, thanks to the sector of real estate and consumer confidence. “Individual loans in the country has also registered a fast growth, but it seems lower during this period”, experts of the Bank of Albania say.
Trend remains the same, more loans for individuals than businesses
While levels of crediting between Albania and the countries of the region differ, the tendency seems to be the same. Thus, the tendency to issue more loans to individuals than businesses is a tendency that dominates in Albania and other countries of Central and Southeast Europe alike. But, even within this group, there seem to be differences. “The distribution of loans according to the sectors of the economy shows that banks in the fourth quarter have increased lending for commerce, hotels and restaurants, while decreasing lending for the service sector”, the Bank of Albania explains. As far as Albania is concerned, the central bank explains that the reason why banks have decreased business loans is because demand for loans by the business sector has been smaller. Bank experts also explain that the majority of loans in the country have been issued for investment purposes. As far as the region is concerned, it seems that this tendency has been different, as most of the loans have been issued to increase cashflow. “Business loans accounted for 24.3% of GDP, while at the end of 2016 they registered a slight fall”, the Bank of Albania explains.
Individuals opt for loans in lek
“The fast growth of crediting in lek has further increased this portfolio in the national currency”. This is said by experts of the Bank of Albania who explain the preferences of individuals for loans. This shows that the tendency to strengthen the national currency is growing among Albanian citizens. “Individual loans have registered high growth rates, driven by fewer requirements and by a growth in demand. Positive developments have also been registered in terms of consumer crediting and home purchases”, bank experts explain. According to them, in the past four years, banks have been more eager to issue loans for individuals.