Banks are more reluctant in offering loans

Banks are more reluctant in offering loans
Albanian individuals and businesses are obtaining less money in the form of bank loans. This is confirmed by the latest data supplied by the Bank of Albania, according to which, lending at the end of the third quarter of this year is almost the same as the same period a year ago. So, in the year to September, the amount of money that banks lent was 539 billion lek, while last year, this amount was 538.8 billion. This indicates that lending has decreased year after year, even if we make a comparison to previous years, such as in 2016 when this figure was 546 billion lek or 2015 when this figure was 545 billion lek. This seems to show that banks are proving to be more reluctant in offering loans to individuals and businesses.

Moving on with the analysis of the figures supplied by the Bank of Albania, we could notice the fact that except for Tirana, where the amount of money lent has not changed, in other areas of the country, lending has decreased. This goes to show that banks are lending money to individuals or businesses who want to do business in the central region of the country more than those who want to do business in surrounding regions. If we take Durres as an example, at the end of the third quarter this year, lending amounted to 39.7 billion lek, while in the second quarter it amounted to 40 billion lek. In Elbasan, at the end of last quarter, banks have offered 13.9 billion lek worth of loans, while in the previous quarter this amount was 14.5 billion lek. The same drop has also been registered in Shkodra and Korça.

More loans offered in the European currency?!

The recent trends confirm it

Loans offered in the European currency seem to show a more positive performance than those offered in the domestic currency. So, referring to the recent data supplied by the Bank of Albania, the number of loans offered in the European currency was higher than loans offered in lek. In Tirana alone, the amount of loans issued at the end of the third quarter of this year was 200.3 million euros compared to 187 million euros in the previous quarter or 199 million euros a year ago.

This reflects an increasing trend of the number of loans offered in this currency, in contrast to the loans offered in lek. A similar phenomenon also seems to apply in Durres, where loans in euros have seen an increase for the periods mentioned above. Namely, 20.3 million euros this year as opposed to 19.3 million euros last year. The same trend also applies in Shkodra, Korça or Vlora. This could be related to the fact that there’s been a growing supply of the European currency in the domestic market as opposed to the Albanian lek. This in turn led to a significant depreciation of the domestic currency when the value of lek plummeted to an all time low against the euro. Let us recall that the same thing has also happened in our banking system with bank deposits where there’s been a growing number of deposits in euro due to the growing supply of this currency in the market.

 

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