Lending to businesses at lowest levels in six years: BoA
Lending to businesses has touched the lowest levels of the last six years.
According to data from the Bank of Albania, the shrinking of the loan portfolio of private enterprise loans continued in the first half of this year.
At the end of June, the amount of bank lending to businesses was ALL 333 billion.
The value of portfolio dropped by ALL 10 billion since the beginning of the year.
Lending to businesses has currently the lowest value since mid-2011.
In addition to the new lending stalemate, this portfolio in the last two years has also shrunk from the massive process of canceling lost loans.
It is estimated that in two years, banks have removed from their balance sheets some 300 million euros of lost loans, which for the most part belong to enterprises.
The long persisting problem of non-performing loans has also become a major inhibiting factor in business lending.
All surveys of business loans in recent years show that banks are very conservative in lending to business, especially when big businesses are concerned.
But, the crisis years have also hit the demand, especially because some important companies have failed in paying back loans, which has deprived the banking system from large and strategic clients.
Although confidence indicators seem to improve, as well as key macroeconomic parameters, business investment initiatives remain pale. The same is true for the willingness of banks to take on big risks, which is understandably low.
Other temporary factors that did not favor lending growth in the first half of this year were the general elections and political tensions in the months leading to them.
SCAN
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