75% of mortgage loans concentrated in Tirana - BoA: Financing for individuals increases. Loans in lek expanded by 20.2%
Credit for individuals continues to grow rapidly, while banks are offering more favorable financing conditions. But credit growth is not the same across the country. The majority of financing for families remains concentrated in Tirana, especially when it comes to purchasing housing.
In the first half of the year, loans to individuals increased by 17.1% compared to the previous year. The main contribution to this increase was made by loans in lek, which expanded by 20.2%, while loans in foreign currency increased by only 5.5%.
This shows that citizens are increasingly turning towards the lek, also due to the more favorable financing conditions in the local currency.
But where are these loans going?
Tirana dominates significantly. The capital accounts for about 56.8% of consumer credit in the country. So, more than half of the financing that citizens receive for consumption is concentrated in Tirana.
The difference is even greater in housing loans. About 75% of mortgage loans are concentrated in Tirana. In other regions, the share is much lower, indicating that the housing financing market remains strongly linked to the capital.
In the total loan portfolio for individuals, consumer credit accounts for about 56.8%, while mortgage credit accounts for about 27.2%. Therefore, the majority of individual loans are still related to consumer needs, but home purchase also remains an important component.
Financing costs have also moved in favor of the lek. The average mortgage rate in lek is around 3.9%, while for consumer credit it is around 8.5%.
In parallel, banks have eased lending conditions for individuals. Competition between banks and higher demand for credit have contributed to increased risk tolerance and the easing of financing standards.
Thus, credit for households is expanding, but the figures clearly show that Tirana continues to be the main center of this financing, especially for mortgage loans. While citizens are taking out more loans in lek, it remains to be seen whether this growth will extend at the same pace to other regions of the country.
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