Banks lower interest rates for business loans

Banks operating in Albania have cut interest rates on loans to businesses during the summer season.

According to data from the Bank of Albania, the average interest rate for loans in ALL for the three months of summer has gradually dropped to 6.97%.

Currently, the average business lending interest is lower than those for individuals, while generally for the last two years lending to individuals has been cheaper.

The decline in interest rates on business loans could be a signal of loosened credit lending in this segment.

In continuation, for many consecutive quarters, lending surveys have shown that loans to business have been quite tight, especially in the corporate segment.

Among other things, this is reflected in higher interest rates, which indicate that the banks’ perceived risk has been higher.

Business loans usually have a higher risk concentration on a single borrower.

The ratio of non-performing loans to businesses throughout the crisis period was much higher than that for individuals.

In the middle of this year, the ratio of non-performing loans to individuals was 9.4%, while for businesses it was 19.4%.

However, the progressive decline in the ratio of non-performing loans this year seems to have led banks to increase lending to businesses.

In July and August, business loans reported a slight growth, while interest rates were in decline.

SCAN

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