Banks tighten business loans amid tough economic situation ahead says Bank of Albania

Bank of Albania
Bank of Albania

In its latest economic monitoring report, the Bank of Albania has confirmed that private banks are restricting loans to big companies which carry the principal weight of the Albanian economy.

BoA says that private banks, forseeing tough economic times ahead, have tightened their loan policy, fearing a rise in bad loans from struggling companies operating in Albania and in the Balkans.

“The main factors affecting tighter loaning standards towards business continue to be linked to problematic loans, sector specific problems and the perception of banks over the macroeconomic forecast’ says Bank of Albania report.

Private banks have closed the tap not only future investments loands but also on working capital loans, which has made everyday operations harder for companies.

While business is finding it harder to get a loan, individuals are experiencing an unsusual generosity from banks which seem to promote soft loans to individual accounts.

“Competition in the banking sector, bank liquidity and monetary policy of BoA have affected the facilitation of individual loans” says the report.

While tigher loaning policies from banks came as a result of higher colateral demands, more worrying remains the negative expectations for the future, with same tight controls exercised during the 4th quarter of 2016.

Copyright 2016 TiranaEcho.Com

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