Lending to economy suffers a decline even in March, BoA data show

The loan portfolio for the Albanian economy has declined in March.

According to Bank of Albania data, lending to the economy fell to ALL 548.2 billion, about ALL 1.7 billion less than in February.

Despite this, the total amount of lending to economy remained almost unchanged compared to the same period of the previous year.

Although the new credit has increased slightly, this was not enough to ensure a significant increase in the total portfolio.

This is related to the fact that lending to the economy for a large part has a short-term maturity, especially in the part related to working capital loans and overdrafts.

Consequently, they mature often and do not guarantee long-term growth of the credit portfolio for the economy.

The short-term lending policy is partly linked to the deposit structure, which has shifted to liquidity instruments over recent years, also due to lower interest rates.

However, despite specific factors, it seems that the most essential factor, the private sector’s demand for loans, is still pale.

Business loans appear to be weaker in quantitative terms, down 2.6% compared to the previous year.

The segment of individuals is performing significantly better, where the loan is showing an annual growth of 5.1%.

However, household lending accounts for slightly more than 30% of total lending to the economy.

Larger volumes are generated by businesses, so lending in this segment remains necessary for bringing lending to the economy out of stagnation.

SCAN

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