Lending to the economy continued to grow at high rates also for May.

According to Bank of Albania statistics, last month a total of Lek 33.5 billion new loans were disbursed for the economy, with an increase of 42% compared to the same period a year ago.

For the entire first five months of this year, the loan disbursed by the banking sector reached the value of Lek 150.6 billion and has increased by almost 37% on an annual basis.

The main contribution to growth continues to be given by the loan in Lek, which for the first five months of the year has almost increased by 58% compared to the same period of the previous year.

The weight of the new loan in Lek to the total has reached 60%, from 52% that was a year ago. According to customer segments, the main influence on the rapid growth of lending in the first months of this year is given by business. The figures show that for May, new loans for businesses increased by 54% compared to May of last year. For the entire 5-month period of 2024, the new loan for businesses reached Lek 106.6 billion, increasing by 58% compared to the same period of 2023.

The banking sector is showing a high interest in lending to businesses, especially major corporate projects, including most of the major public-private partnership infrastructure investment projects.

For May, lending to individuals also continued to grow steadily, with 10% more compared to the same period last year.

For the first five months of the year, the banking sector disbursed Lek 43.8 billion in loans to individuals, an increase of 21% compared to the same period a year ago.

The rapid growth of credit this year is based on optimistic perceptions about the performance of the economy, which is maintaining satisfactory growth rates, supported especially by the real estate and tourism sectors.

The good condition of the balance sheets of the banking sector and the decreasing levels of problem loans are positively influencing the supply. The maintenance of low levels of interest rates by the Bank of Albania is also having an impact on lending rates in Lek.

The increase in credit is also evident in the performance of the total portfolio or its surplus. At the end of April, the loan portfolio for the economy reached the value of Lek 783 billion, with an increase of Lek 12 billion compared to April.

On an annual basis, credit growth jumped to 9.9% compared to the same period a year ago, while at the end of April, the annual growth was 8.5%.

In the individuals segment, the loan portfolio is growing by 11.5% compared to the same period last year. Meanwhile, for businesses, growth remains at slightly lower levels, with 8% on an annual basis. However, this is also due to the higher share of foreign currency loans in the business portfolio, which has been negatively affected by the further strengthening of the lek in the foreign exchange rate.