“Getting a loan is less difficult” - BoA: Approval procedures were easier for businesses in the second half of 2024
In the second half of 2024, the process of obtaining a loan from banks has not been very difficult for businesses. The latest Bank of Albania survey on business borrowing shows that banks have not "shaken their hands too much" in July-December 2024, responding positively to loan requests from small, medium, or large businesses.
The difficulty index of the process of borrowing from banks resulted in 0.36 for all enterprises, marking a decrease compared to the previous period. Compared to the previous year, the level of difficulty has decreased for all three categories of businesses.
The relationship with banks is considered important and necessary, especially by families and less so by small or large businesses. Despite the fact that the difficulty of obtaining a loan has been lower, the cost of credit continues to be considered the main element that makes it difficult to obtain a bank loan, more pronounced for small and medium-sized enterprises.
On the other hand, elements of difficulty in obtaining a loan include "the ambiguity of bank requirements and bureaucratic procedures", "credit guarantee conditions", "lack of flexibility on the part of banks for restructuring and repaying the loan", and others, the importance of which has been increasingly assessed by all three groups of enterprises.
As for the demand for credit from businesses, it has been high in the second half of 2024, while regarding planning for borrowing in the next six months, the responses of enterprises show that their demand for credit is expected to remain high and increasing.
When asked how they would act if they were not financed by banks, the majority of enterprises (about 38% of the total) would secure this financing from an alternative source. Also, about 36% of the total enterprises claim that they will turn to a bank or other institution again, while about 26% claim that they will postpone their plans, and both of these weights have remained almost unchanged during the period.
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