Albania without a capital market: Impaired development and distorted competition

Albania is the only country in the region without a functioning capital market, a gap that is becoming a visible obstacle to economic development and financial justice.

At a time when Albania aspires to transition toward a formalized, diversified, and European-integrated economy, the absence of a functional capital market remains one of the country’s most critical strategic gaps in its financial infrastructure.

The lack of a functional capital market is a strategic handicap for Albania’s economic development and financial democratization. This vacuum not only hinders sustainable growth, but also generates competitive distortions, limits transparency, and shifts financial justice toward a small elite operating in the shadows.

Albania remains one of the only countries in the Western Balkans without an active stock exchange to support investment, innovation, and transparency. Market capitalization stands at zero, revealing a stark disconnect between the country’s economic potential and the financial infrastructure meant to support it.

Market capitalization missing – Development stalling

Experts assess that the absence of this vital economic segment limits businesses’ access to long-term financing, restricts investment opportunities for citizens, and exacerbates inequalities in the distribution of national capital.

Market capitalization—the ratio between the value of listed shares and GDP—is 0% in Albania. The country is completely off the radar of any normal financial ranking, stuck in a status quo that is neither justifiable nor tolerable any longer.

The consequences are clear:

• Companies rely almost exclusively on bank credit, often costly and bound by strict terms.
• Citizens lack access to diversified investment instruments, except for real estate and bank deposits.
• Savings institutions, including pensions and insurance, do not contribute directly to economic development, as they have no viable domestic instruments in which to invest accumulated capital.

Market capitalization is a key indicator of a country’s financial depth.

While in Albania the capital market is practically at 0% of GDP, in Serbia it reaches 45%, and in North Macedonia 40%. Serbia has built a reliable market for IPOs and new investments. North Macedonia, though smaller in scale, has succeeded in creating a system that offers trust and stability for investors. Albania, by contrast, remains in a frozen state, where the lack of a capital market is not only a financial barrier but a wall against institutional modernization.

In these countries, capital markets function as important channels for mobilizing savings and financing investments. Albania, on the other hand, remains dependent on bank lending—often expensive, short-term, and inadequate for development projects.

This situation has dual effects:

1. It limits business access to capital, hindering growth and technological transformation.
2. It isolates citizens and institutions from the benefits of long-term investment, reinforcing a passive savings model.

Why does Albania still lack a functional capital market?

This gap is not the result of a lack of ideas or expertise, but rather political and institutional inertia, and a failure to prioritize this issue at the policy level.

The near-zero market capitalization can be attributed to:

• The absence of political will to open a regulated, supervised, and transparent capital market.
• A fear of corporate transparency, which would require disclosure of financials and adherence to accountability standards.
• The dominance of informal and concentrated capital structures operating outside organized markets.

A recent case involving the financial company NOA, which issued private bonds and was touted as “the first sign of a capital market in Albania,” deserves critical scrutiny. Rather than representing a step toward market development, this case reflects:

• The absence of a structured and regulated framework for public issuance of financial instruments.
• The risk of illusions—where one enterprise operating selectively outside a public exchange creates the appearance of a market that in reality does not exist.
• The reinforcement of information asymmetry, where investors lack access to standardized, monitored data that a transparent exchange would ensure.

Time to Act: Building a capital market from scratch

If Albania is to achieve its goals for sustainable development, digitalization, and EU integration, establishing a capital market is a necessity—not a luxury. This entails:

• Establishing a functional national stock exchange, through a public–private partnership under the supervision of credible international authorities.
• Reforming the legal and regulatory framework, in line with EU directives, to ensure investor protection and corporate accountability.
• Providing tax incentives and financial education for companies to go public, especially medium and large enterprises with potential to grow beyond bank financing.
• Developing initial markets for municipal and corporate bonds, as a structured transition toward a full and sustainable exchange.

The models are there—But Albania Lacks the Will

Serbia, through the Belgrade Stock Exchange, has succeeded in attracting new IPOs and building a bridge between domestic savings and long-term investments. North Macedonia, despite its small market, has developed a transparent system that sends clear signals to investors about the market’s stability and rules. Both countries have built capital markets that, although modest in size, offer clear signals of transparency, stability, and openness to investment.

Meanwhile, Albania—and Kosovo—remain in a status quo that conveys uncertainty, limits ambition, and closes the doors to qualitative growth for domestic businesses.

The absence of a stock exchange keeps companies trapped in informality or closed financial structures, pushing them toward internal financing models that constrain growth and innovation.

Capital Market: Not just finance, but economic democracy

A capital market is not merely a financial instrument. It is a democratic mechanism for the distribution of wealth, transparency, and citizen participation. Its absence in Albania is a deep symptom of the economic distortions that obstruct balanced and competitive development.

A capital market is an irreplaceable pillar of a functional market economy. It creates opportunities for mobilizing domestic capital, enhances corporate transparency, and promotes the democratic distribution of wealth. Without it, Albania remains isolated from modern financial logic and reliant on a fragmented system where competition is distorted and development is unequal.

Albania needs a new financial agenda—one that sees the capital market not as a distant luxury, but as a missing cornerstone of a functioning economy. Because without it, any strategy for economic growth, innovation, and integration is inherently unsustainable.