Bad loans continue to show improvement in the loan portfolio from the Bank of Albania. The credit surplus, the strengthening of the lek and tourism are among the main factors that have brought about this improvement.

Non-performing loans decreased to the value of 4.69% in February, thus touching the new lowest historical level of the last 15 years.

According to data from the Bank of Albania, bad loans started the year at the value of 4.88% in the loan portfolio in January, while last year, they were in the ratio of 5.16%.

The improvement in the loan portfolio is mainly attributed to the loan surplus. At the end of February, the loan portfolio reached 750 billion ALL, an additional 9 billion from January.

Beyond the official statistics, tourism is estimated to have had a significant effect on the economy of the private sector. The demand for goods and services has continued to grow due to the increased number of visitors, translating into an increase in liquidity for many sectors of the economy.

However, this effect may not be fully visible due to informality, which remains high.

Also, the strengthening of the lek against the euro and the slight increase in interest rates by the Bank of Albania during the past year has helped to keep problem loans under control.

Last year, the Bank of Albania increased the basic interest rate only twice, and the level of 3.25% is among the lowest in Europe, with a large difference from the rates applied by central banks in Europe and the region.