Banks tighten lending standards for individuals

TIRANA, May 12 – Lending standards during the first quarter of 2010 were eased for businesses but further tightened for individuals, the Bank of Albania said in its monetary policy report. The progress of lending standards for businesses was in line to the banks’ expectations in the fourth quarter of 2009. Standards applied to commercial loans were in general eased only for corporations, and remained tightened for small and medium enterprises, said the central bank. The main factors influencing on the tightening of standards for commercial loans were the specific problems of the sector where businesses operate, the macroeconomic and the situation of the problematic loans.
Meanwhile, loans to individuals were tightened because of the individuals’ financial situation, the amount of bad loans and the bank’s liquidity. The decisions of the central bank was the only factor which eased lending standards for both businesses and individuals.
Banking trends show the current ease in approving new loans will be temporary and is expected not to continue during the second quarter of 2010 despite rising demand by businesses and individuals.