Loan demand increased, banks approved almost 80% of applications in the second 6 months of 2023

2024-05-02 08:17:48, Ekonomi CNA

Loan demand increased, banks approved almost 80% of applications in the second 6

The demand for loans in the banking sector increased in the second half of last year.

During the second half of 2023 (period July 1 - December 31, 2023), banks report that they have considered a total of 67,352 loan applications, an increase of 3.6% compared to

last six months and by 4.7% compared to the same period a year ago.

Of the total number of applications, 91% of them belonged to individuals, while 9% to businesses (4% to large enterprises and 5% to small and medium-sized enterprises).

The distribution of loan applications has shifted somewhat in favor of businesses, both compared to the first half of the year and compared to the second half of 2022.

Compared to a year ago, the increase in applications came mainly from the category of large enterprises, with an increase of 19.5% and from individuals, with an increase of 4.5%.

According to the Bank of Albania, for the entire year 2023, the new loan reached a record value of almost 319 billion ALL, increasing by 14.5% compared to 2022.

In the total number of applications considered during the period, it turns out that about 21% of them were rejected by the banks. This rate was 1.7 percentage points lower than six months ago, but slightly higher, by 0.6 percentage points compared to a year ago.

The decline in bank rejections in the second half of 2023 was spread across all three categories of customers, but was more pronounced in the segment of large enterprises.

The rejection rate has been decreasing for banks with domestic and foreign capital, especially in the segment of large enterprises. It is noted that during the period, both banking groups have shown an easing tendency towards loan requests of large enterprises, rejecting only 4% of their applications in the case of foreign banks, and 3% in the case of banks with domestic capital. In the case of small and medium enterprises, both groups of

banks have also been more receptive, rejecting only 6% of their loan requests. Regarding the segment of individuals, both groups have continued to have opposite attitudes, but with a facilitating tendency in the case of foreign banks. Thus, local banks have rejected only 6% of individuals' applications, remaining at the same level as

last period, while foreign banks have rejected about 28% of applications, marking a decrease of 2 percentage points compared to the first half of the year.

In general, from the analysis of the Bank of Albania, it is concluded that the progress of the applications reviewed by the banks during the second half of 2023, indicate a broad-based increase in the demand for loans, both from the private sector and from of enterprises, but also a somewhat more lenient attitude of lending by banks./ Monitor.al