Who earns more from deposits? - Bank of Albania figures reveal a strong difference between individuals and businesses
The more deposits citizens open, the more expenses banks will have for their interest payments. The latest data from the Bank of Albania shows that banks have paid about 464 billion lek in interest to citizens and businesses that have a deposit and whose maturity has mostly ended.
Businesses, although they have made much fewer interest payments than individuals, account for about 94% of the total value of interest paid. Meanwhile, individuals account for about 97% of the number of interest payments, with only 27 billion lek paid. In other words, individuals have 97% of the number of payments, but only about 6% of the value, while businesses have 3% of the number, but 94% of the value. This is how the Bank of Albania figures are interpreted.
This deep difference between the interest rates received by citizens and businesses can be explained by the fact that businesses have much larger amounts of money on deposit than citizens, so the interest should also be higher. However, this fact alone is not enough.
In terms of loan disbursement, the differences are not that big between citizens and businesses. According to statistics from our Central Bank, commercial banks have disbursed nearly 47 thousand loans to individuals and 59 thousand loans to businesses in the first half of this year. This amounts to 63 billion lek of loans disbursed to citizens and 109 billion lek to businesses.
Businesses continue to have a significant weight in the activity of banks. The latter are financing businesses more for working capital and investments in exchange for their return to the bank in installments and interest, while businesses are choosing to lock up a portion of their income in deposits in exchange for earning interest from the bank after a few months or years.
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