Bank accounts without costs? – Bank of Albania is considering it
The Bank of Albania is considering the possibility to force banks to offer a low-cost account for low-income citizens. This account should serve to receive basic payment services and increase their financial involvement.
The second Deputy Governor of the Bank of Albania, Natasha Ahmetaj, said during an international conference on payments in Vienna that the Bank of Albania intends that within 2022, 70% of the adults should have a bank account. At present, the central bank estimates that less than 40% of Albanians over 18 years old have bank accounts.
Last year, the Bank of Albania presented the national strategy for reforming the payment systems market. One of the objectives of the strategy is to promote competition and reduce the costs of payment services. Enabling a more extensive and lower-cost formal infrastructure can shift payment flows from informal channels to formal ones.
A significant example are remittances. According to the Bank of Albania, the costs to send money to Albania on a formal way are estimated to be about 8-18%, significantly higher than the region, and far from the 3% target targeting by 2030. This makes a part of remittances enter Albania in informal ways.
It is estimated that in Albania only 4% of remittances enter through banking channels. The perception of banking procedures as complicated prevails, also because of the low financial culture. This explains why 57% of individuals choose money transfer companies that have higher costs but are easier to access.