In the third quarter of 2025, Albanian banks kept lending conditions for businesses unchanged, according to the  Credit Survey  published today by the Bank of Albania.

Banks remained cautious with high-risk business loans. However, they approved more loans overall, citing better financial performance among small and medium enterprises. Short-term liquidity loans also saw an increase.

In contrast, lending to individuals became more restrictive. During the quarter, banks tightened standards and conditions for personal loans, especially for home purchases. The report notes a sharp rise in loan rejections for citizens.

New limits set by the Bank of Albania in July also played a role. These restrictions, which cap loan-to-value and debt-service-to-income ratios for new real estate loans, pushed lending standards higher.

For first homes, commercial banks may now lend up to 85% of a property’s value. For second homes, the ceiling drops to 80%. Loan installments must not exceed 40% of income for loans in lek, or 35% for loans in foreign currency.

According to banks, these measures—combined with market uncertainty and concerns over collateral—have further tightened lending to individuals.

Looking ahead to the fourth quarter:

Businesses: Lending policies are expected to remain stable, with slight easing for small and medium enterprises.
Individuals: Conditions will likely tighten further, particularly for home loans.

Demand for credit in Q3 was mixed. It rose among small and medium enterprises but fell among large companies and individuals, especially for housing and consumer loans.

In Q4, credit demand is projected to stay strong from businesses for all purposes, while individuals may borrow less for housing but slightly more for consumption.

/a.c/