Low interest rates "craze" the demand for loans - The rate for mortgage loans fell to 3.9%. The rate of rejection by banks also decreases
The interests of the new loan in Lek, but also in Euro, have decreased in the third quarter of the year. According to data from the Bank of Albania, mortgage and consumer loan interests began to fall during the second quarter of the year and, after reflecting the reduction in the base rate, are at lower levels than a year ago.
Specifically, interest on housing loans averaged 3.9% in the third quarter, from 4.1% and 4.5% in the second and first quarters of the year, respectively. Consumer credit interest has also decreased to 8.8%, from 9.5% and 9.7% in the previous two quarters.
Interest rates for loans in euros have fallen since August, following the direction of the base rate of the European Central Bank. The average interest of new loans in euros for businesses was 6.2% in the third quarter, from 7.0% in the first two quarters of the year, while the average interest of mortgage loans in euros for individuals remains high.
Interbank market interest rates remain anchored near the base rate, exhibiting little volatility and minimal differences from it.
The environment of lower interest rates in the domestic and foreign markets, together with the further improvement of business confidence encouraged businesses to seek higher amounts of loans to meet their increased needs. Also, as a result of lower interest rates, credit demand from individuals was reported to be high.
The rate of rejections of loan requests was reduced for the third quarter in a row, dictated mainly by banks' assessments of the quality of borrowers and their employment history and the stability shown in the labor market.
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