Denada Jushi
Buying a house, starting a business, or studying at a world-class university are some of the motivations that have led Albanian citizens to seek bank loans.
A low-level banking sector employee told ACQJ that most loan applications are related to buying a house, mainly by young couples. But what happens next?
Economic uncertainty often causes these loans to turn into problem loans, because for various reasons they may not be affordable.
Latest reports on the banking sector, according to the Financial Stability Report, show that non-performing loans in Albania have shown an increase.
Data show that in the first half of 2025, the ratio of non-performing loans reached 4.12% of total loans. This indicator continued to increase during the year, reaching 4.19% in August, which is also considered the highest level recorded during that year.
Although the level of non-performing loans remains relatively low compared to previous periods, the fluctuations in this indicator suggest that measures should be taken to prevent this phenomenon from increasing further.
The Albanian banking system accounts for around 362 million euros in non-performing loans, while in another period in 2025 this figure was estimated at around 357 million euros. This means that banks hold hundreds of millions of euros in loans on their balance sheets that are considered at risk of being recovered.
According to data reported for the banking system, the stock of non-performing loans has reached around 36 billion lek. The increase in this stock has been observed mainly in certain loan categories, such as lek loans, long-term loans and loans to individuals.
According to the report's analysis, credit risk is still considered controlled.
So what happens at the start of 2026?
Preliminary data shows that the non-performing loan ratio started 2026 with a slight increase. In January of this year, this indicator was recorded at 3.85%. However, on an annual basis, the ratio remains declining, as a year ago it was at 4.12%.
However, this analysis is based only on the first months of the year.
At the same time, the stock of non-performing loans at the end of January is estimated at around 36.2 billion lekë, marking an increase of 4.3% compared to the same period a year earlier.
These fluctuations are also seen as related to the complexity of economic developments.
Many factors directly affect the uncertainty of individuals or businesses and, if the economy faces external shocks or a slowdown in economic activity, the solvency of borrowers may deteriorate.
These concerns have also been heightened by developments in the global economy. Tensions in the Middle East and attacks on Iran have led to an increase in oil prices in international markets, and consequently in Albania, increasing the risks of an increase in inflation and visible consequences for the economy.
According to the economic analyses that ACQJ has conducted during the years 2025–2026, but also according to analyses conducted outside Albania, in the region and beyond, some factors that may have influenced the increase in problem loans are the increase in the cost of living, which makes it more difficult for families to repay monthly loan installments.
Another factor is the rapid growth of lending, especially for home purchases and for financing business activities. In recent years, an increasing number of families have taken out loans to purchase homes or invest in real estate.
For this reason, financial authorities have increased their attention to lending rates and the quality of banks' portfolios. The Bank of Albania has emphasized the need to carefully monitor the effect that rapid credit expansion and market competition may have on lending standards.
Institutions have taken several regulatory measures to limit financial risk. However, data show that during the second half of last year, these measures did not bring about a slowdown in lending rates, especially in loans used to finance the purchase of housing.
Hundreds of millions of euros of loans at risk of recovery and a stock of over 36 billion lek prove that a significant portion of borrowers continue to face difficulties in repaying their obligations./acqj.al
