Small business sustains the economy, but away from banks/ BoA: The main obstacles are related to the level of informality and lack of collateral
Micro, small and medium-sized businesses continue to hold the main weight of the Albanian economy, but not of bank financing. Based on the data, this segment accounts for about 99.9% of the total number of businesses, generates about 78.2% of the added value in the economy and employs about 82.5% of salaried employees. However, according to the Annual Report of the Bank of Albania for 2025, these businesses benefit from less than half of bank credit for business, 46.8%, and only 27% of total credit for the private sector.
In other words, the segment that sustains the country's real economy remains less financed by the banking system than its share in production and employment. The Bank of Albania calls this gap a structural problem, underlining that behind it lie several well-known obstacles such as the high level of informality, lack of collateral, lack of history of relations with banks, and limited financial knowledge. According to the report, these factors make access to the financial market for micro, small and medium-sized businesses more difficult and costly.
Essentially, the report highlights one of the strongest paradoxes of the Albanian economy: small business is the basis of entrepreneurship, but not of bank borrowing.
It is precisely on this gap that the Bank of Albania established the Micro, Small and Medium Enterprise Financing Program at the beginning of 2025. According to the report, the program aims to reduce the cost of loans for this segment, make them more affordable and accessible, strengthen the relationship between businesses and the banking sector, and promote investment and productivity. The mechanism foresees that the Bank of Albania will provide long-term liquidity to commercial banks, which will then use it exclusively for investment loans to SMEs, while the credit risk remains with the banks themselves.
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