Covid-19 tightens lending – Banks will be even more conservative this quarter

Albanian banks reported tightening lending standards in the first quarter of the year. The Bank of Albania’s survey of lending activity showed that lending standards were tightened for all customer segments and are expected to tighten further in the second quarter of the year. As banks’ responses were collected in early April, it is believed that the situation created by the Covid 19 epidemic has been significantly reflected in their chart of lending activity.

For individuals, lending standards have been tightened for both home and consumer loans. The tightening for individuals was caused by the perception of increased risk associated with the macroeconomic situation in the country and the outlook for it, as well as the solvency of the borrower.

Among businesses, the tightening of lending standards was more pronounced in the category of small and medium enterprises, as well as in loans granted in order to finance investments. According to the banks’ judgment, the terms and conditions of the loan were negatively affected by the perception of increased risk, driven by the unprecedented situation caused by Covid-19.

As for individuals, tightening credit standards for businesses was a result of the perception of an increased risk associated with the borrower’s solvency and the expected outlook for the economic situation. The tightening was mainly expressed in lower loan values, higher conditions in loan agreements, as well as a decrease in maximum maturity.

SCAN

*Material i përgatitur nga portali SCAN. Ripublikimi mund të bëhet vetëm kundrejt citimit të autorësisë dhe burimit origjinal.