According to data from the Bank of Albania, 97% of loans taken by individuals are being repaid on time, confirming that only a very small portion of borrowers are facing difficulties with installment payments. The rate of non-performing loans (NPLs) for individuals has decreased to 2.9%, down from 3.4% a year ago.

Compared to businesses, individuals have consistently shown fewer problems with loan repayments, largely due to their lower exposure to financial risk.

Furthermore, since a significant portion of the personal loan portfolio consists of home mortgages, borrowers generally demonstrate strong commitment to meeting their repayment obligations.

However, loan performance among businesses has also improved over the past year. The non-performing loan ratio in the business segment dropped to 5.1%, from 5.7% the previous year.

The strengthening of the Albanian lek against the euro is believed to have had a positive impact on the repayment ability of borrowers with euro-denominated loans but income in local currency. In fact, the average euro-lek exchange rate fell for the fourth consecutive year, reaching a new historic low in 2024.

Meanwhile, the overall non-performing loan rate for the entire Albanian banking sector declined to 4.17% at the end of 2024, from 4.74% at the end of 2023. In value terms, non-performing loans amounted to 34.7 billion lek, or approximately €350 million.