400 million euros in microfinance loans - In 2024, the sector's portfolio grew by 12%. It continues to be the main lender in agriculture
The microfinance sector, i.e. non-bank financial entities, savings and loan associations and their unions, disbursed around 400 million euros in new loans in 2024. According to preliminary data collected by members of the Albanian Microfinance Association, the sector's loan portfolio grew by 12.2%, in a trend similar to last year's growth.
More loans were granted to small and medium-sized businesses. Specifically, loans to businesses increased by 5% compared to last year in terms of outstanding balance, while it slowed down by 6% in terms of the number of active loans. Among the factors that have influenced this result are the increase in competition from the banking sector, the increase in the average loan value (from 7,500 euros to 8,400 euros per loan), as well as the decrease in demand, especially in the micro segment.
About 25,000 family businesses are supported by microfinance each year, while for every loan given to a start-up business, 3 jobs are created. According to microfinance members, the sector's activity is supported by capital accounts and loans taken from investors, or the banking sector, while sovereign schemes offered by the government remain the exclusive domain of the banking sector and do not help mitigate the costs of credit for the segments served by microfinance.
On the other hand, new loans to individuals increased by 24% in both volume and number. The average loan granted to individuals remains at the same level as in 2023 at 82 thousand lek.
Microfinance continues to be the main lender in agriculture, due to its business model and presence in rural areas. Agricultural credit expanded by 31% in 2024, while the average loan granted remained at around 2,800 euros per loan. The number of active clients in Other sectors that have been supported with financing from non-bank financial institutions are services, including tourism, trade and vehicle repair, and construction.
As for non-performing loans, they remain stabilized at 6.28%, demonstrating good risk management practices due to the highly diversified client base.
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