Microfinance Reduces Interest Rates; C-Bank
The Bank of Albania is taking important steps towards a more transparent and fairer financial market for the protection of citizens.
Jonida Teta Kacani, Deputy Director of the Supervision Department at the Bank of Albania, informed that the central bank has approved regulatory changes aimed at further reducing the maximum effective interest rate for small installment loans and protecting citizens in their relations with non-bank financial institutions (microfinance), ATA reported.
Specifically, she explained, there has been a 3-fold decrease in the interest rate on loans from microfinance institutions.
Kacani explained that “more specifically, the changes aim to limit hidden fees and further reduce the interest and costs of consumer loans, reduce the value of penalties, and increase transparency towards consumers from the stage of advertising products and services.”
Kacani said that "another change has to do with the request for in-depth financial analysis of the client, by microfinance institutions, where it is determined that the loan installment should not exceed 60% of the total monthly income that he possesses, thus helping in healthy lending".
Also, she continued, the regulatory changes oblige microfinance institutions to create a blacklist for clients with insolvency and for this category, the possibility of restructuring the loan is seen, according to the internal regulation of the microfinance institution, facilitating them based on solvency and when they cannot pay, the terms of the contract are executed.
Referring to statistics, the non-performing loans in non-bank institutions at the end of 2024 marked a level of 4.17% from 4.74% which was in 2023.