The Bank of Albania announces that since its first application in 2022, the maximum NEI (Effective Interest Rate) has suffered a sharp decline for installment loans for the amount of Lek 200,000.

Before the measures taken by the Bank of Albania, the maximum NEI offered on the market reached 300%, while today, four years later, this indicator calculated and published by the Bank of Albania has decreased to 71%.

The Effective Interest Rate includes all costs that a borrower pays for the loan received (such as the interest rate, various commissions, the cost of maintaining an account if it is mandatory to obtain the loan, the insurance premium paid by the borrower, etc.).

Meanwhile, the maximum NEI implies a ceiling interest rate for consumer loans. Consumer credit products, even in small amounts, affect the finances of a wide group of consumers.

The Bank of Albania calculates the maximum NEI every six months, based on the data it collects from the Credit Registry on loans disbursed in the previous six months. It is calculated as the market average for each product/disbursement interval plus a margin of 33%.

In 2025, the Bank of Albania took additional measures to further reduce this indicator. Given the stabilization of the maximum NEI for installment loans for the amount of 0 – 200,000 lek, the Bank of Albania decided to no longer apply the additional margin of 33% for this segment, to further reduce the costs of consumer loans to more affordable levels.

In 2021, in the context of rapid consumer credit development, the Bank of Albania revised the regulation “On consumer and mortgage credit”, mainly aiming to address the deviations observed in the market regarding the costs of credit charged to borrowers.

More specifically, the Bank of Albania started applying this ceiling at the beginning of 2022 as a measure to protect consumers from potentially abusive interest rates, applied mainly by some non-bank financial institutions. The regulatory revisions aimed to approximate the standards and best practices applied in the European Union countries for determining the limits for the NEI, as a comprehensive indicator of known credit costs, based on the calculation of a market average.