Businesses, wholesale loans for long-term investments - BoA: Only 30% use it for short-term operating expenses of the activity
Businesses take out loans mainly to make long-term investments. According to a survey by the Bank of Albania, the number of businesses applying for loans to make long-term investments has increased, while those to cover short-term operating expenses have decreased to 30%.
About 7% of enterprises declare that they have taken out a loan for more than one purpose, where the combination of the two above purposes dominates, as well as the combination of covering short-term expenses and repaying an older loan, and this share has been decreasing in all three enterprise groups.
For most businesses, debt accounts for 20% of their income. To pay it off, businesses have tried to reduce other expenses. Only a few of them have increased product prices to cover the cost of credit, while only 9% have used reserves. The debt/equity ratio has also fallen. Nearly 81% of enterprises report that the total value of debt is approximately half of the enterprise's capital,
About 73% to 74% of small, medium and large enterprises declare that the loan received is collateralized only with real estate, while the rest of the enterprises have used other forms of collateralization. The remaining enterprises claim that the loan received is uncollateralized.
What about loan sources?
In total, formal sources of borrowing (from banks and non-bank financial institutions) were used by 89% of borrowing enterprises, marking a decrease compared to the previous year.
Getting a loan from a bank is not considered as difficult a process as before by businesses. The ambiguity of bank requirements and bureaucratic procedures, high financial costs to meet bank requirements, are not as important problems for obtaining a loan compared to 2024. The difficulty index of the process of borrowing from banks in the first half of this year has dropped to 0.34 for all enterprises.
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