The figures were discussed at a meeting between central bank Governor Gent Sejko and chief executives of commercial banks, also attended by Economy and Innovation Minister Delina Ibrahimaj.

The talks focused on developments in the banking sector, credit growth, the property market and issues related to financial stability and the development of the financial system.

Sejko said the pace of lending was supporting consumption and investment, while stressing that credit growth should remain prudent and sustainable, backed by appropriate lending and risk-management standards.

Mortgage lending rose 16.1% year-on-year in the first half, while the average interest rate on lek-denominated mortgages stood at 3.9%.

The meeting also reviewed the Bank of Albania’s macroprudential measures governing housing finance, including limits on loan-to-value and debt-service-to-income ratios. Sejko said the measures had contributed to more prudent and balanced lending in the housing market.

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Household lending rose 17.1% year-on-year at the end of June, driven by a 20.2% increase in lek-denominated loans. Lending in foreign currencies grew 5.5%.

Central bank data show that Tirana remains the main destination for household lending, particularly mortgage finance. The capital accounted for about 56.8% of consumer loans and roughly 75% of mortgage lending, underscoring the high concentration of housing finance in Tirana.

Business lending grew 11.6% year-on-year in the first half of 2026, with trade making the largest contribution, at 6.1 percentage points. Loans to the trade sector accounted for 46.2% of the total business loan portfolio.

Industry ranked second, followed by construction, which represented 21.7% of the portfolio, and services at 16.1%. Agriculture accounted for the smallest share, at 1.3%.

Interest rates remained broadly stable, while lending in lek continued to gain ground.

The Bank of Albania said the rise in lending to households and businesses pointed to an expansion of bank financing to the economy, although the data also highlighted the strong concentration of housing finance in the capital.

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Data from the Bank of Albania showed that lek-denominated loans accounted for 55.8% of total credit to the economy at the end of 2025, up from 54.7% a year earlier. Credit growth during the year was driven primarily by lending in the domestic currency.

Deposits also posted solid growth. The total value of deposits in the banking system reached 1.84 trillion lek at the end of 2025, marking an annual increase of 9.1%.

The share of deposits held in lek rose to 48.6% of total deposits, compared with 47.6% at the end of 2024, indicating that savings in the local currency expanded at a faster pace than foreign-currency deposits.

According to the central bank, the performance of foreign-currency deposits was partly affected by the strengthening of the lek, which reduced the value of those holdings when expressed in the domestic currency.

The figures underscore the continued trend of financial de-euroisation in Albania, as both borrowers and depositors increasingly favour the national currency.

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Banks approved 39.1 billion leks in new loans during the month, up about 19% compared with the same period a year earlier.

The main driver of growth was corporate lending, which rose 25% year-on-year. Lending to individuals also increased, up around 8% compared with April last year.

The central bank data show that new loans to non-financial private corporations reached 25.5 billion leks in April, up from 20.5 billion leks a year earlier, reflecting an expansion in business investment activity.

New mortgage lending amounted to 6.6 billion lek, compared with 7.03 billion lek in the same month last year.

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Speaking at the signing ceremony of a new partnership between the government, the banking sector and businesses under the national SME financing programme “Double Your Business”, Rama pointed to a sharp increase in credit activity and a steep decline in non-performing loans.

The agreement provides for 250 million euros in low-interest lending and 30 million euros in sovereign guarantees to support small and medium-sized enterprises (SMEs).

Rama said total lending in Albania has risen from around 5 billion euros five years ago to 10 billion euros today.

“We are seeing a doubling of the economy’s financing capacity by second-tier banks, which clearly demonstrates through facts that the economy is healthy and has significant potential for further growth,” Rama said.

He added that non-performing loans ratio, once viewed as a major risk to the economy, has fallen to “negligible levels”.

“A decade ago, bad loans accounted for nearly 25%,” he said.

Rama also noted that new lending over the past two years alone had approached 5 billion euros, describing the figure as “extraordinary”.

“This is yet another reason to take a courageous step forward, thanks to this cooperation and thanks to the full willingness of the Bank of Albania to support economic growth through the expansion of small and medium-sized enterprises,” he said.

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According to data published by the Bank of Albania, new loans issued by banks totaled 374.4 billion leks in the January-November period, up 12.8% from the same period a year earlier.

The increase in lending was supported by the economy’s positive performance, higher demand for financing and the sound financial health of the banking sector, the central bank data showed.

Individuals accounted for the largest share of credit expansion in 2025. New lending to households reached 114.7 billion leks, marking a 21.7% increase year-on-year.

Growth was recorded both in housing loans and consumer credit, reflecting rising confidence and greater financing needs among households.

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Despite agriculture accounting for around 20% of Albania’s GDP and providing employment to about one-third of the population, it currently receives less than 2% of total bank credit, a gap Sejko described as urgent to address.

Speaking at a joint meeting with the Ministry of Finance, the central bank Governor highlighted the government’s support measures aimed at encouraging lending to agriculture, including the Sovereign Guarantee Scheme and the Business Financing Program for Micro, Small, and Medium Enterprises (SMEs).

These initiatives offer banks a reliable and low-cost funding base, while reducing credit risk, especially by addressing collateral issues.

Sejko stressed that the agricultural sector’s development is essential not only for economic growth but also for social stability. He called on banks to recognize the high potential returns of investing in agriculture and to apply specialized attention and expertise to this sector.

He also framed increased agricultural financing as a moral responsibility for banks, noting that supporting the agri-food supply chain is vital for Albania’s population and overall national development.

The governor concluded by urging all stakeholders to view agriculture financing as a key pillar for sustainable and long-term economic progress in Albania.

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The growth is primarily driven by a rapid rise in loans denominated in the local currency, the lek, supported by historically low interest rates. The expansion covers a wide range of borrowers, including businesses and households, financing investment, consumption, and working capital needs.

Credit quality remains sound, as reflected by low levels of non-performing loans. Notably, loans to start-up businesses represent a modest 1.2% of total business lending.

This positive lending trend underscores continued confidence in Albania’s economic outlook and supports the country’s ongoing development.

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According to the central bank’s report, lending to small business increased by 4 percentage points, whereas lending to medium sized businesses slowed down by 3.8%, the lowest rate recorded in the last three years.

According to central bank, the dynamics within the business credit have also determined the shift to the credit structure towards large businesses, which accounts for 53.7% of the total or 5.4 percentage points more than a year ago.

Banks have increased funding for businesses operating in all sectors of the country’s economy, with the lending portfolio recording a double-digit annual growth in all five categories, and hospitality and tourism sector recording strongest growth.

This portfolio rose 25% year-on-year, five percentage points higher than during the same period of 2023. Bank lending to industry and trade also accelerated, recording a high growth rate with 20% and 15.8% respectively.

Bank lending to construction and agriculture increased averagely by 16.5% and 11.4% respectively, confirming the high lending demand from all sectors of the economy.

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Attending the meeting were Prime Minister Edi Rama, Governor of the Bank of Albania Gent Sejko, Minister of Finance Petrit Malaj, Minister of Agriculture and Rural Development Anila Denaj, heads of the banking system and representatives of agribusiness companies.

Governor of the Bank of Albania Gent Sejko said that, “The Bank of Albania has made available a fund of 25 billion Lekë intended to support lending to micro, small and medium-sized businesses. This program, which will be implemented through second-tier commercial banks, offers the opportunity to significantly reduce the cost of credit for these businesses, which can reach up to 2% interest rate, but in any case, it will not exceed the level of 3.5%, creating opportunities for them to invest in physical assets, capital assets or technological platforms, which serve to increase productivity”, said Sejko.

“This extraordinary measure of the Bank of Albania constitutes an important opportunity to promote lending to small and medium-sized businesses in general, and those operating in the agricultural sector, in particular”, said Sejko.

“Agriculture sector has an economic and social importance. The agricultural sector employs about a third of the country’s workforce and generates about 20% of the national output. However, even after three decades of transition, it continues to be characterized by a low level of productivity and income. The average income per capita in rural areas is approximately 50% of the average income per capita in urban areas”, emphasized the Governor. /a.f/r.e/p.s./