Zef Preci, from the Albanian Center for Economic Research, says that the
quick growth of bad loans reflects not only the economic crisis, but
also the massive banking corruption.
“Essential for the increased burden of bad loans remains the bad choice of clients and keeping the risk at the client. We must admit that corruption is present in the public and private sector. One can see the liquidation of collateral to notice that groups of individuals who own money of suspicious origin are committed in buying them. Employees and important managers of important private banks are able to own wealth that go to banks with 40% of the initial value”, Preci declared.
Preci says that the system is closed also with the blessing of the authorities, and is interested to preserve the status quo.
“I think that there has been a tight policy from the World Bank, which has taken more care of the bank shareholders for guaranteeing their survival in a market where there is more sharing than competing. In the past four years, Albania has had only two or three banks that give loans in tight conditions, and that make them tighter each year. The other banks keep functioning based on the hidden cost that are unjustly imposed, even abusive, to consumers and clients”, Preci explained.
According to him, the solution is opening the market and making abusive banks to face the cost.
“Banks are businesses and have an important development function. It is not the end of the world to accept bankruptcy or union of banks, buying or selling them”, Preci declared.
By the end of last September, bad loans reached 24.3% of the total. A survey of Deloitte shows that the figure might be much bigger.
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