Lending in decline in the first 6 months of 2017

Credit to the Albanian economy declined for the first half of this year.

According to Bank of Albania statistics, the total loan portfolio fell to ALL 543.5 billion at the end of June, with a further decline of nearly ALL 1 billion compared to May.

The value of the loan is 1.6% lower compared to the same period of the previous year.

For several months, the Bank of Albania is optimistic about lending rates and, in fact, the reported value of new loans this year is higher.

Only for June, the new loans were at ALL 26 billion, five billion more than June last year.

But the fact that the portfolio’s total value continues to decline shows that perhaps a large part of new loans are in fact overdraft renovations from businesses or existing loan restructuring.

The total amount of loan used by the private sector of the economy is not growing and the most problematic segment remains business, where lending continues to be declining.

More positive is the situation in the segment of individuals, which appears more stable and a steady growth in time.

This is due to a high share of long-term loans for real estate purchases, but also to a lower effect of erasing lost loans, a phenomenon that has seriously eroded the loan portfolio for businesses in recent years.

The best risk distribution and higher stability are factors that are pushing banks to focus more on lending to individuals over the last few years.

However, a factor with a significant impact on lending rates during the first half of the year may have been the general election.

Pre-election periods have historically been characterized by a reluctant behavior of businesses in undertaking new investments.

SCAN

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