Sejko: The banking sector should support small and medium businesses more

2024-12-19 16:54:00, Ekonomi CNA

Despite the growth rates of lending, credit to the private sector is relatively low compared to the counterpart countries in the region, which indicates untapped potential in supporting businesses and individuals.

The governor of the Bank of Albania, Gent Sejko, said at the year-end meeting with the Albanian Association of Banks, that, taking into consideration the specifics of the Albanian economy, the micro, small and medium business sector is of particular importance, as the main segment of active businesses in Albania.

In the objectives for the future, however, Sejko also emphasized the need to maintain the low level of the ratio of non-performing loans.

"The rapid growth of credit observed during the last months constitutes a potential risk for credit quality in the future. Despite the current low level of non-performing loans, banks should keep in mind the further reduction of classified non-performing loans and ensure rigorous credit risk assessments in their portfolios," said Sejko.

The governor also emphasized the need to promote more use of the local currency.

"Intensification of efforts to promote the use of the Lek currency for deposits and loans would reduce dependence on foreign currencies and exposure to exchange rate risk, as well as promote the effectiveness of monetary policy in the country," he said.

Another issue that requires greater commitment from the banking sector, according to him, is limited financial inclusion. A part of the population, especially in rural areas, remains unserved by the banking sector, reducing access to credit and other financial services. Sejko emphasized that the increased focus by banks on underserved communities and small businesses is important in terms of economic growth and long-term stability.

A very important issue, according to the Governor, is the digital transformation. "The adoption of innovative technologies needs to be accelerated at rates comparable to the most advanced markets. Banks must continue to invest in technology, highlighting the need for digital banking solutions to improve customer experience, address cyber security challenges and increase customer confidence in online services,” he said.

Sejko also pointed out climate risk and green finance, adding that the implementation of the National Strategy for Climate Risk and the compliance of the banking sector with the new guidelines for climate risk management will be the focus of the increased requirements throughout the year 2025. The Bank of Albania encouraged banks to increase financing for green and sustainable projects.

Alignment with EU standards and acquis communitare will continue during the next year. According to Sejko, special attention is needed especially regarding the compliance with the requirements and measures against the prevention of money laundering (PPP) and the financing of terrorism (PFT), which require continuous efforts and investments, within the VI round of evaluation by MoneyVAL for Albania.

SEPA membership facilitates standardized Euro payments across borders and the Governor requested that the banking system commit to being fully part of the SEPA systems, investing in technology, infrastructure and staff training, in order to meet technical and regulatory requirements.

He also underlined the need for more customer-focused services.

"Increasing customer satisfaction through personalized banking services, undertaking financial education programs and competitive banking solutions are prerequisites for strengthening your role in the economy and achieving long-term sustainability," said the Governor./ Monitor Magazine