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 claims to advance towards a formalized, diversified, and integrated economy into European markets, the absence of a functional capital market remains one of the country’s largest strategic gaps in its financial infrastructure.

The lack of a functional capital market represents a strategic handicap for economic development and the financial democratization of the country. This gap not only hinders sustainable economic development but also fuels distortions in competition, limits transparency, and shifts financial justice to a small elite operating in the shadows.

Albania remains among the few countries in the Western Balkans without an active stock exchange to support investment, innovation, and transparency. Market capitalization stands at zero, highlighting a major gap between economic potential and the supporting financial infrastructure.

Market capitalization is missing, development stagnates

Experts assess that the absence of this vital segment of the economy hinders businesses’ access to long-term financing, limits investment opportunities for citizens, and increases inequality in the distribution of national capital.

Market capitalization – the ratio between the value of listed shares and GDP – is 0% in Albania. Albania remains outside any natural financial rankings, in a status quo that is neither justified nor tolerable anymore.

The consequences are clear:

• Companies rely almost exclusively on bank loans, which are often costly and come with strict conditions.
• Citizens do not have access to diversified investment instruments, except for the real estate market and bank deposits.
• Savings institutions, including pensions and insurance, do not directly contribute to economic development, as they have no avenues to invest the 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, although smaller in size, has managed to create a system that offers trust and stability to investors. Albania, on the other hand, remains in a frozen state, where the lack of a capital market is not only a financial barrier but also a barricade against institutional modernization.

In these countries, capital markets function as important channels for mobilizing savings and financing investments. Albania, by contrast, remains dependent on bank credit, often with expensive, short-term, and insufficient conditions for developmental projects.

This situation affects two directions:

• It limits businesses’ access to capital, hindering growth and technological transformation.
• 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 due to a lack of ideas or expertise, but the result of political and institutional inertia and a failure to prioritize the issue at the political and institutional level.

An analysis of the market shows that the near-zero value of the capital market results from:

• The lack of political will to open a regulated, transparent, and supervised market.
• The fear of corporate transparency, which requires the publication of financial statements and adherence to accountability standards.
• The dominance of informal and concentrated capital structures operating beyond organized markets.

The case of the financial company NOA, which recently issued bonds in the private market and has been cited as “the first sign of a capital market in Albania,” should be analyzed with critical caution. Instead of being seen as 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 a single enterprise acting selectively outside a public exchange creates the perception of a market that does not actually exist.
• The reinforcement of information asymmetry, where investors lack access to the same standardized and monitored data as in a transparent stock exchange.

Time to act and build a capital market from scratch

If Albania is to meet its goals for sustainable development, digitalization, and EU integration, the creation of a capital market is an immediate necessity. This implies:

• Opening a functional national stock exchange, in a public–private partnership and 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.
• Fiscal incentives and financial education for listed companies, especially for medium and large enterprises capable of expanding beyond the banking market.
• Developing initial markets for municipal and corporate bonds as a structured transition toward a complete and sustainable stock exchange.

Examples exist, but Albania lacks the will

Serbia, through the Belgrade Stock Exchange, has been able to attract new IPOs and create a connection between domestic savings and long-term investments. North Macedonia, although with a small market, has created a transparent system that sends clear signals to investors about market stability and order. Both these countries have built capital markets that, though limited in size, send clear signals of transparency, sustainability, and openness to investors.

Albania, as well as Kosovo, meanwhile, remain in a status quo that transmits uncertainty, limits ambition, and closes the doors to quality growth for domestic businesses.

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

The capital market is not only about finance – it’s about economic democracy

The capital market is not just a financial instrument. It is a democratic mechanism for wealth distribution, transparency, and citizen participation. Its absence in Albania is a deep symptom of economic distortions that hinder the country’s balanced and competitive development.

The capital market is an irreplaceable pillar of a functioning market economy. It creates opportunities for mobilizing domestic capital, increases corporate transparency, and promotes the democratic distribution of wealth. Without it, Albania remains isolated from modern financial logic and dependent 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 pillar of the market economy. Because without it, every strategy for economic growth, innovation, and integration is, at its core, unsustainable.