PRESS RELEASE
Representatives of the banking system and business community discuss on: ''Business - Banking Relationships: Lending perspective 2016''

On March 3rd 2016, at the premises of the Bank of Albania, representatives of business associations and executives of the banking system met to discuss on: "Business Banking Relationships: Lending perspective 2016".

The meeting was organized at the initiative and under the auspices of Governor of the Bank of Albania, Mr Gent Sejko. It aimed to promote the dialogue and understanding between the banking system on the one hand and the business community on the other, with the ultimate goal of boosting lending to the economy, thus accelerating economic activity.

In his speech, Governor Sejko noted the vital role of the banking system and business in the economic development of Albania. He also stressed the necessity for deeper cooperation between all the stakeholders, in the near future. He urged banks to be more active, and return to the traditional role of commercial banks, which is, lending to the economy. Moreover, Governor Sejko stated that the business community ought to reshape its attitude, particularly by increasing their professionalism when it comes to designing and implementing the projects, for which they apply for bank loans.

Governor Sejko also mentioned the major developments in the financial sector, underlining that the implementation of the inter-institutional plan for reducing non-performing loans has contributed positively to the bank balance sheets. Governor Sejko pointed out the recent economic developments in Albania, which show that the economic environment offers numerous opportunities to do business in Albania. Structural reforms are starting to yield results, whilst the Bank of Albania remains committed to give its contribution in this regard, through its accommodative monetary policy stance and cooperation with all the relevant stakeholders.

The lending activity would substantially recover only when the economic and financial situation in Albania becomes more stable and the situation of the banking system is very favourable in relation to the capitalization, liquidity and financial soundness. Governor Sejko urged the representatives of commercial banks operating in Albania to inform their parent banks about Albania's economic situation, in order to convince them that Albania offers all the necessary conditions for credit growth.

In his speech, the Chairman of the Albanian Association of Banks, Mr Christian Canacaris, highlighted that the perceptions and expectations on the economic activity are overall optimistic; therefore, the objectives of the banking system in relation to lending the economy in 2016 are increasing.

In 2015, the reduction in non-performing loans was satisfactory. This reduction was mainly due to both the coordinated efforts of banks and the implementation of measures by the Bank of Albania. Meanwhile, this process needs to continue and special attention should be paid to improve the collateral execution process.

The President of Union of Chambers of Commerce and Industry of Albania, Ms Ines Muçostepa, stated that the business community appreciates the orientation of banks to lend to new sectors with a high development potential, such as agriculture and tourism. She appealed for the further increase of the support for businesses operating in these sectors. Ms Muçostepa stressed that banks should consider businesses as a partner and not an occasional customer.

An open debate followed, where representatives of both interest groups expressed their opinions on how to further strengthen the business-bank cooperation. Among others, business representatives pointed out the importance of financial literacy. The more financially literate a society is, the more capable this it is to make the right financial decisions. Another matter of concern was the increase of the advisory role from the banking system. They asked from it to determine priorities for the treatment of businesses in difficulty. Business representatives urged the banks to facilitate credit application procedures, in view of the Albanian reality. Credit growth in the agricultural sector came as a request from representatives of the agro-businesses.

Representatives of the banking system, on their side, asked the businesses to be more committed and present more realistic and well-studied projects, as the only way to increase lending. Further formalization of the economy remains another important matter to them, which, in turn, would facilitate lending even more.

In conclusion, the meeting was deemed as very useful by all the participants. They considered it as an initiative to open a new window regarding the bank - business dialogue.

• The speech by Governor Sejko
• The Speech by the Chairman of the Albanian Association of Banks
• The Speech by the President of the Union of Chambers of Commerce and Industry of Albania (in albanian)