Lending to businesses declined in 2016 – Only manufacturing, hotels on the rise

Lending to business resulted once again lukewarm in 2016. According to data from the Bank of Albania, the total lending to private enterprises decreased to 343 billion ALL from 346 billion ALL that had been at the end of 2015.

The weakening of lending in this segment indicates that the banking system continues to be extremely cautious, but tight supply is not the only factor.

Healthy demand for loans has yet to recover fully after the shock from the crisis, especially in strategic sectors and enterprises.

Also, it has to be said that lending figures have been cleared from lost loans, a process that in the past two years has resulted in a significant contraction of the total loan portfolio for the enterprise.

The figures show that lending is declining for most sectors, but, however, there are important exceptions.

Lending to the manufacturing industry increased by 8.6% and at the end of last year reached a total value of approximately 60 billion ALL.

A positive trend was also reported in hotels and restaurants, with an annual lending growth of 7.5%.

Among other sectors, lending has generally reported a negative performance.

Trade, construction, mining industries and agriculture show a declining trend, while lending to the energy sector has remained almost unchanged compared with a year ago.

SCAN

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