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The acceleration of economic activity and the improvement of the situation of businesses in the country in recent months has increased their solvency, causing non-performing loans to continue to decline.
According to the Bank of Albania, the non-performing loan ratio dropped to 6.35% at the end of October, the lowest rate since 2008.
Compared to the same period a year ago when bad loans reached 8.29% as a result of the pandemic crisis where many businesses were in difficulty and consequently many citizens lost their jobs as a result of the crisis, this indicator has dropped by almost 1.94%.
The central bank previously predicted that the level of non-performing loans could reach up to 10% this year, but the data show a significantly improved situation for the banking system.
The non-increase in the non-performing loan ratio is related not only to the facilities undertaken by the bank a year ago with the postponement of loan installments for 6 months for individuals and businesses affected by the crisis, but also to the mitigation measures within the pandemic management in place.
The IMF in its latest report on Albania predicted an increase in non-performing loans that could go up to 15% in 2021, where according to the international financial institution despite the pressure caused by the Covid-19 pandemic, it seems that it has not yet materialized in visible effects. negative in this regard.
But, in addition to the improvement of the economy as a whole, it seems that the continuation of lending by the banking sector has given its impact on reducing the level of bad loans, as the portfolio of bank loans granted by the end of October reached ALL 651.9 billion.
Out of it, ALL 41.3 billion result in the segment of non-performing loans, significantly lower than the level of a year ago when they reached in the same period ALL 49.1 billion non-performing loans.
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