Analysis of lending and deposit conditions from banks, first 6M -2025

In mid-2025, the Albanian financial market is operating in an environment that continues to be favorable for borrowing, mainly due to the accommodative monetary policy of the Bank of Albania and the still low cost of deposits. These conditions have encouraged investment and consumption, although the benefits are not evenly distributed across all market segments, making a careful approach to financial decision-making necessary.

According to information from the Bank of Albania for the first half of 2025:
For businesses, credit in lek is currently provided at an average rate of 6.7 percent, slightly higher than at the beginning of the year. Small loans remain cheaper, while large loans have become more expensive, making the moment relatively favorable for small and medium enterprises seeking to finance expansion or working capital. On the other hand, credit in euros, with an average rate of 5.8 percent, has remained stable, but with an increase in large loans and a decrease in smaller ones. For exporting companies generating revenues in foreign currency, this remains a valuable opportunity, as long as active currency risk management is applied.

For individuals, the situation is even clearer.

Mortgage loans in lek have reached a historically low level of 3.8 percent, making them the most advantageous option not only due to lower cost but also due to reduced risk from exchange rate fluctuations. Conversely, mortgage loans in euros have risen to 5.1 percent, making them less attractive for those whose income is in local currency.

Regarding consumer loans, the instability of interest rates and the possibility of maintaining a high cost over long periods imply that they should only be taken when the economic rationale is strong and justified.

On the savings side, deposits in lek are providing an average return of 1.7 percent, down compared to last year. Because inflation exceeds this level, savers holding most of their funds in long-term deposits are gradually losing purchasing power. Deposits in euros remain at an average level of 1.2 percent, relatively stable, but with an ever-decreasing gap compared to lek, indicating that financial returns remain low here as well, despite the advantage of preserving value for those operating in foreign currency.

In this context, businesses planning long-term investments should favor borrowing in lek, especially if their activity does not depend on imports in foreign currency. Exporters and importers should seriously consider using hedging instruments to protect margins from currency fluctuations, while diversifying funding sources beyond traditional banks can reduce dependence on a single credit market.

For individuals, mortgages in lek are the safest choice, while savings should be directed toward instruments that provide inflation protection, avoiding long-term deposits with low interest rates. Consumer loans remain a tool that should be used prudently and only when financially necessary.

Although current conditions still favor borrowing, there are several risks for the coming months. A faster-than-expected rise in euro interest rates, narrowing of the gap between the lek and the euro, or inflationary pressures that reduce the real return from deposits could quickly change the current balance and require adjustments to financial strategies.