World Bank provides $100 million to support financial sector
TIRANA, March 15 – The World Bank has approved a new $100 million soft loan to support Albania’s financial sector by reducing vulnerabilities related to the high level of non-performing loans preventing credit growth and strengthen supervision on bank and non-bank financial institutions.
The new operation builds on the work and results of previous World Bank policy-based lending operations that have supported a wide range of reforms to restore the country’s macro-financial stability, rekindle economic growth, improve management of public finances, and reform pension and energy sectors, the Washington-based lender said in a statement.
“The reforms supported by this operation aim at addressing the current vulnerabilities of the financial sector and enhancing its resilience. These reforms will enable the right environment for banks and nonbank financial institutions to expand credit to the private sector, which in turn will boost economic growth,” said Ellen Goldstein, the World Bank country director for the Western Balkans.
The financial sector development policy loan is a fixed spread IBRD loan with an eight-year grace period and repayment of 31 years.
The new loan comes after the World Bank recently provided $70 million to further enhance Albania’s competitiveness and improve the business climate which although slightly improving in the past few years still lag behind other EU aspirant regional countries.
In its latest Global Economic Prospects report, the World Bank expects the Albanian economy to have grown by 3.2 percent in 2016 and pick up to 3.5 percent in 2017 and 2018, in forecasts which are slightly lower compared to the government’s more optimistic expectations.
Since joining the World Bank in 1991 soon after the collapse of the country’s communist regime, the World Bank has supported a total of 90 projects comprising around US$2.56 billion in credits and grants. The active portfolio has ten investment lending projects under implementation with a total net commitment of US$615 million.