Albanian households’ demand for lending on the rise as banks pursue relaxing policy
The households’ demand for loans increased again in the last quarter of last year.
According to a lending activity survey drafted by the Bank of Albania, the households’ demand for loans was reported to increase both for consumer loans and housing loans.
Lending to individuals is the market segment with the best performance in recent years in Albania.
Banks have consistently facilitated lending standards in this segment, mainly through lower interest rates.
According to banks, lending standards remained relaxed in the last quarter of last year, continuing to boost credit growth in this category.
In November 2017, the total value of loans granted to individuals by banks and other financial institutions amounted to ALL 176 billion, up 5.2% compared to the same period a year earlier.
Meanwhile, loan demand in the business segment is still volatile.
Demand for loans in the fourth quarter of 2017 was growing in the segment of small and medium-sized enterprises and declining for larger enterprises.
On their part, banks have not reported significant changes in lending standards, which remain tighter in relation to the segment of individuals.
Business lending growth remains the main challenge for the banking system in Albania.
At the end of November 2017, the loan portfolio in this segment was ALL 10 billion less than in the same period a year earlier.
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