Loan stalemate, Bank of Albania: “Slow economic growth”

“This comes from different indicators that we value for the trust of businesses and families. The economic growth pace is better than two years ago, but lower than the potential. The banks report that there are a few projects valid for funding”, says Klodi Shehu, Director of the Financial Stability at the World Bank.

By the end of the nine months, loans for the economy have dropped with 10 billion ALL in less than one year. Facing the weak request in the country and the lack of projects, Banks have started to credit businesses abroad.

“Credits for residents and non-residents do not represent an exclusive activity. This does not mean that residents are not being credited and non-residents are being credited. The banking system has enough funds for domestic loans”, Shehu says.

Despite the quick growth in the past year, the credit that banks have given abroad remain limited. But loans are not the only investment they have abroad. Banks have established 240 million ALL in other types of deposits.

“We have established some measures that are trying to make it more expensive for the capital demands, for the constant increase of deposits outside the banking system. We have reduced the request for capital to give loans within the country. These measures that target the credit offer, don’t seem to be valid to guarantee the credit growth that we expect”, explained the Director of Financial Stability at the Bank of Albania.

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