Microfinance companies will face new rules starting from January. They will have to verify customers and lower interest rates for customers while paying off the debt.

The new rules that are being established for non-banking institutions are not only intended to strengthen control over them but also to set conditions.

Microfinance has been operating for many years in the market and what distinguishes it from commercial banks is the approval of the loan without bureaucracy and the return of this loan with higher interest rates.

In this aspect, many individuals and businesses have found solutions to their problems, but many others have complained, have not repaid the loan, and even due to the behavior of the institutions, have been forced to take other loans to pay off debts.

To fix the system, the central bank will now require these companies to work with banking standards, verifying customers for their ability to pay.

For example, for a loan worth Lek 500 thousand, according to the customer's choice, microfinance collects Lek 60 thousand more at the end of 6 months, and the longer the time for its repayment, the higher the interest.

For this reason, the Central Bank announces that it will set conditions for the reduction of commissions and interest rates. The new regulation is expected to take effect starting from January 2025.

The new rules for non-banking financial institutions were approved in the latest Financial Stability report, which is one of the important periodic documents prepared by the Bank of Albania. The report emphasized that the financial system in the country is stable, but lending should be moderated.