Bad loans dropped for the eighth month, going to the lowest level in six years.
01/09/2017 00:00
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Recent data from the Bank of Albania show that the level of bad loans went down to 15.3%, from 15.6% that it was one month ago.
Bad loans have kept dropping since last October. According to the Bank of Albania, compared to the same period of one year ago, bad loans dropped with 6%. When compared to the peak of 2014, bad loans have dropped with 10%.
The Bank of Albania says that the reason for this drop are restructuring and removing of loans. By removing them, banks take off their balances loans that have not been paid for at least three years. This was a request imposed by the rules of the Bank of Albania.
However, some of the banks are removing even unpaid loans newer than three years, if debtors agree to pay part of the debt. The sum is agreed based on the case, between the bank and the borrower.
Sources from the Bank of Albania say that this method has been very efficient for reducing the portfolio of bad loans, while restructuring continues. The latter is a process in which the bank accepts to postpone the deadline for paying the debt and reduce the interest rate.
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