The extra need for cash that Albanian citizens have seems to have obliged them to head to banks for loans. This is confirmed by the latest observation carried out by the Bank of Albania regarding the performance of crediting. “Banks report a growth in the demand of individuals for loans in the second quarter of 2017 in line with their expectations.
The increase in the demand for loans has been mainly encouraged by the improvement of the borrowing conditions and the growing need for consumer loans and mortgage loans to fund the purchase of homes”, this institution quotes. Meanwhile, this institution adds that consumer confidence has had a negative impact on the demand for individual loans. On the other hand, during this period “businesses have shown a higher demand for loans to fund their cash flow”.
Let us recall that the second quarter of this year coincided with the pre-election period in the country and a political crisis, which seem to have had an impact in the rising demand for more cash in general for individuals, who see banks as the only source to meet these needs. But there are also other alternatives, which the Bank of Albania did mention, accepting them as an existing fact of the Albanian economic reality, for individuals and businesses. “The lower demand for loans by businesses has been perceived by banks as a consequence of the use of alternative sources of finance outside the banking system”, experts say, implying that while individuals mainly address to banks for cash, businesses try to find other ways to solve this acute financial problem, such as third parties or informal sources.
