Business unable to pay loans

The Ministry of Finances says that only for the first nine months of the last year, the unpaid business loans increased with 5.2%, from 2.6% that grew those of individuals.

Numbers show that businesses are more problematic for banks. Business bad loans in September reached 26% of the total, or 10% more than that of individuals. The difference is much bigger, since the loan is three times bigger than that of families.

The Ministry of Finances numbers show that business loans have deteriorated with a strong pace, especially for the last two years. Bad loans for business was 15.5% by the end of 2010. In less than two years it increased with 10.5%, at around 500 million Usd. Since 2010 business has faced very difficult times.

The income of companies in general, according to budget revenues, decreased with 15% last year, but this is not the only cause that their financial situation deteriorated.

In parallel with the decreased number of sales, many companies that have managed public works have had delayed payments by the government. Business associations claim that the debt that the government owes them reaches 200 million EUR.

Together with the decreased sales, this has put business in difficulties for paying their bank obligations, a negative cycle for which the International Monetary Fund and the World Bank have asked the Albanian government to interrupt it and start paying the companies.

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