In a keynote address published by the Bank of Albania, Deputy Governor Ahmetaj said the central bank sees sustainable microfinance as client-centric and anchored in financing micro and small enterprises, with consumer lending kept proportionate rather than becoming the dominant business line. He said the Bank has already tightened safeguards for the sector through caps on effective interest rates and penalty charges, stronger risk management and transparency requirements, a more selective licensing approach, and supervisory action against underperforming entities with weak reputations. He linked those measures to a sector that has become more complex in Albania and the region as markets expand, providers diversify, competition changes and European integration requirements increase. The speech stressed that portfolio quality remains the main indicator of institutional soundness, and that digital financial services can broaden access only if they are supported by reliable data infrastructure, sound credit assessment, qualified staff and continuous supervisory oversight. Consumer credit may have a place within a diversified offering, but excessive reliance on it can raise over-indebtedness risks for borrowers and reputational risks for the microfinance sector. Looking ahead, further legislative initiatives are under consideration to create a clearer institutional separation between lending by non-bank entities and the management of non-performing loans. The stated aim is to reduce conflicts of interest and improve market transparency.
Bank of Albania2026-05-20
Bank of Albania outlines tighter microfinance safeguards and considers separating non-bank lending from non-performing loan management
In a keynote address, Bank of Albania Deputy Governor Ahmetaj outlined a vision of sustainable, client‑centric microfinance focused on financing micro and small enterprises, backed by caps on effective interest rates and penalties, stronger risk management and transparency, more selective licensing, and supervisory action against weak entities. He warned that excessive consumer credit heightens over‑indebtedness and reputational risks, and stressed that digital financial services must rely on robust data, sound credit assessment, qualified staff and ongoing supervision. The Bank is considering legislation to clearly separate non‑bank lending from non‑performing loan management to reduce conflicts of interest and improve transparency.