Banks "shake hands" for loans/ Citizens are expected to seek fewer loans in the third quarter
Citizens are expected to seek fewer loans for home purchases in the third quarter, as commercial banks will tighten lending standards. As previously announced, banks will have stricter criteria for approving a loan, based on the latest decision of the Bank of Albania that sets ceilings on the value of the loan that banks will provide for the purchase of a first or second home, in euros or lek, as well as the weight that the installment should take in the borrower's income.
What about the demand for loans from citizens in the second quarter?
According to the Bank of Albania's lending activity survey, individuals' demand for credit increased in the second quarter, both for housing purchases and for consumer financing. This increase in demand came as a result of more favorable interest rates and improved consumer confidence.
Banks have responded to the high demand with a larger number of approved loans. The factors that most influenced the decline in the rate of individual loan rejections were the stability of employment in the labor market and that of relations with the bank.
As for lending standards, they remained almost unchanged in the second quarter of 2025. These standards include the internal guidelines or criteria for approving a loan at a bank. They are determined before the loan is negotiated on terms and conditions. The standards define the types of loans that the bank considers desirable and undesirable, the necessary characteristics of the borrower (for example, balance sheet conditions, income situation, age, employment status), so that a loan can be obtained.
Meanwhile, the terms and conditions of lending were also unchanged in the second quarter. They refer to the terms and conditions of the approved loan as defined in the loan contract, which is agreed upon between the bank and the borrower.
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