Albanian banking system tightens lending standards in Q1 of 2015

The Bank of Albania published on Monday the results of bank lending survey for the first quarter of 2015, which shows that second-level banks have tightened their lending standards applied to businesses and households.

According to the Bank of Albania, the standards of lending to businesses were tightened for the second quarter in a row.

Regarding the standards of lending to households, banks report easier standards applied to housing purchase and consumer loan.

The performance of bank lending standards was positively affected by factors related to competition in the banking system and Bank of Albania's policies.

Some of the main factors contributing to the tightening of lending standards included the household and business's financial situation, non-performing loans and specific problems facing the business sector environment.

The main terms and conditions that banks applied to businesses were widening the margin on risky loans, and reducing the size of loan.

Banks applied the easing standards on households by extending the maturity and increasing the size of loan, according to Albanian Telegraphic Agency.

The demand for loan in the first quarter of 2015 has seen a decrease for businesses and a slow increase for households compared to the previous quarter.

The dropping demand on the side of businesses has mainly come from small and medium enterprises, while the slow increase on the side of households reflects the weak demand for consumer loan. Endit