Loans to individuals in February 2013 declined to 140.7 billion lek, down from 141.7 billion lek a year ago, registering a 0.7 percent shrink and the lowest rate since late 2010
TIRANA, April 9 – Lending to businesses in early 2013 has slowed down to its lowest historical rates and shrunk compared to last December. Data published by the country’s central bank show total lending to businesses at the end of February 2013 reached 399 billion lek, up 2.6 percent year-on-year but down 0.65 percent compared to last December when it was at 401.7 billion lek.
Detailed data show “trade, repair of cars and household equipment” holds the majority share of lending with 135 billion lek or 34 percent of total lending to businesses. The crisis-hit construction sector ranks second with 63 billion lek, down from 70 billion lek in February 2012, followed by the processing industry with 56 billion lek and “production, distribution of electricity, gas and water” with 56 billion lek.
Despite accounting for almost 20 percent of the GDP and employing half of the country’s population, the agriculture sector is one of the least financed sectors by commercial banks. Total lending to the agriculture sector at the end of February 2013 was at 5.6 billion lek almost at the same levels compared to a year ago and accounting for only 1.4 percent of total lending to businesses.
Loans to individuals in February 2013 declined to 140.7 billion lek, down from 141.7 billion lek a year ago, registering a 0.7 percent shrink and the lowest rate since late 2010. Lending in lek accounts for 45 percent of total lending and is mostly awarded to finance real estate.
While deposits continue maintaining their growing trend, lending slowed down to the lowest historic levels in the first two months of 2013. Bank of Albania data show total lending in February 2013 reached 551 billion lek, up only 1.6 percent year-on-year. Meanwhile, deposits continue maintaining their positive growth trend, unveiling consumers’ saving trend and uncertainty about escalating crisis impacts. At the end of February 2013, total deposits reached 933 billion, up only 6 percent year-on-year.
Lending has almost frozen after growing by an average of 10 percent in the past three years compared to the pre-crisis levels of 30 to 50 percent. Lending sharply decelerated to 2.36 percent at the end of 2012, down from 12 percent in 2012. In the global crisis year of 2009 credit growth slowed down to 11 percent and decelerated to 9.6 percent in 2010, according to Bank of Albania data.
