Ekonomia

Economic situation, Sejko: We expect an increase in bad loans, will depend on the measures and the duration of the pandemic

Economic situation, Sejko: We expect an increase in bad loans, will depend on

In the coming months, it is expected that there will be an increase in bad loans in Albania. Governor Gent Sejko speaking at the conference on the economic situation said that during 2020 there was no increase in bad loans, but this year their growth is expected.

According to the governor, even in the worst case scenario of the growth of these loans, the banking system is thankfully healthy, although they are currently at a lower level. During the conference, the governor said that now the Albanian economy and the level of loans will depend on austerity measures and the prolongation of the coronavirus pandemic.

How much is it expected to increase the number of bad loans?

Bad credit as a result of the pandemic will increase. Fortunately, bad loans did not increase in 2020, it turned out that bad credit was at the level of 8.1%. I mentioned at the end of 2020 we had positive indicators. Credit grew by 7.7%. The financial sector had good results. But of course in 2021 there may be a deterioration, in 2020 we pushed the moratorium, the restructuring of loans, so to give the opportunity to banks. For businesses to face the pandemic, to extend deadlines, restructure loans, to postpone them.

With the expiration of the terms, non-performing loans will increase. I do not know the figure. It depends on the pandemic, how much the austerity measures will be, how the economy will react in view of the extension of the pandemic. We expect increase in bad loans. Even in the worst case scenario of bad credit growth, the banking system is healthy. We will not need turbulence from the rise of bad credit. We are at a low level.

The informal lending market has existed and exists. Not a major problem, but the analysis has been updated.

We have taken the informal market into analysis. Of course, we as a regulatory institution have taken measures to avoid the informal market. The most serious partnership is the bank, as the informal market has higher interest rates. Of course serious customers who are considering repaying the loan, for a specific purpose, when they take on that debt make accounts of how they will repay that debt.

For these clients the bank is the most serious partnership. The informal market prefers uninformed persons, who have immediate needs but who later face consequences. We may also have business-to-business cases that have problems with banks. Not just the individual. Borrowing is allowed. "They are all challenges."

Clarification: Bad loans are loans that the business has taken in the banks and that it has not repaid and there is a risk that it will never repay them.

* Tiranapost.al.