Less loans for economy

24/12/2012 00:00

Loans for economy entered a full stalemate, despite the strong growth of
deposits. Official data from Bank of Albania show that by the end of
the third trimester, credit for economy was 59.4% of total loans.

Three years ago, 70% of the credit was redistributed. The decrease was stronger for funds in foreign currency, where it plunged from 110% in 2009 to 76% in the last trimester of 2012.

These indicators show that banks have turned into agencies that only accept deposits and don’t give loans. According to World Bank, Albania is a country with small financial mediation even if compared with similar economies in the region.

But where is going the money that the banks in Albania are depositing? By the end of October, deposits broke the historic level of 1.7 billion ALL, or 15% of the GDP.

In the last three years, the money that banks invested abroad has increased to extraordinary levels and according to Bank of Albania, this is related with the increased danger they perceive in our economy. But beyond reasons, these indicators show that while our economy is facing a lack of liquidity and businesses are facing fewer investments for lack of funds, the 1.7 billion USD savings of the Albanians are financing foreign economies. Credits given by banks for our economy are still falling by hampering this way new investment and economic growth.

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