Loans, affordable for Albanians' pockets - BoA: Families' solvency has improved. Loans account for less than 30% of income
Albanian families do not face difficulties in repaying their loans. According to the Financial Stability Report of the Bank of Albania, the solvency of borrowing families appears to have improved in the first half of this year, while they are also optimistic about the affordability of debt in the future.
Overall, the share of households with a loan to repay appears to have decreased. Of the households surveyed by the Central Bank, only 17% were in the process of repaying their installments.
Loans account for less than 30% of their monthly income in most households. At the same time, the share of households for which loan payments exceed 30% of income has decreased, indicating an easing of the debt burden.
But, are we expected to have a higher demand for loans from households by the end of this year?
In fact, households expect their demand for credit to cool in the next six months. About 64% of them have stated that they do not expect to take out a new loan.
Almost the same thing has happened with businesses. The share of enterprises that have debts to pay has decreased, with only 33% of enterprises stating that they currently have debts to pay.
The debt service to income ratio is estimated to be decreasing for most enterprises, compared to the previous half-year. For 81% of businesses, the total value of the loan is approximately half of their capital.
Businesses expect their demand for credit to remain positive, but to slow down over the course of 2025.
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