The Bank of Albania Lending Survey showed that second-level banks tightened lending standards for businesses in the first quarter of the year, which was driven by the perception of risk related to economic outlook and prospects, as well as solvency and the current situation of businesses.

While for the following period, lending standards for small and medium businesses are projected to be eased for the purpose of financing investments and covering liquidity needs.

Easing consists in conditions of general lending terms, in the application of lower margins on riskier loans, but also non-price components, through increasing the size of the loan and more liberalized conditionality in loan agreements.

The banking system has expanded its lending portfolio to small business earlier this year, in response to the growth of startups in the sector that has been stimulated through the implementation of zero tax and VAT policy for small business.

The Bank of Albania announces that lending to the small business segment marked a double-digit increase during January-February 2021.

According to the BoA, lending by banks to small business increased by 11.35% on an annual basis and reached the value of ALL 70.4 billion at the end of February 2021.
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