Bad Loans and Their Impact on Lending to the Economy (Albanian Banking System) Monograph Study

Lending to the Albanian economy provided other negative signs during the first three months of this year when bankers reported tightening credit conditions for both businesses and individuals. Meanwhile, the demand for credit has become noticeable. The main contributors to the tightening of credit standards for businesses are specific problems of the sector where the business operates, problem loans and some factors overall macroeconomic. Second-tier banks after 2007 were faced with the rise in the level of non-performing loans which experienced a progressive increase from 2007 to 2014. This paper analyzes the reasons for the increase in the level of non-performing loans in the Albanian banking system, especially after in 2007. In this paper, particular attention is paid to the correlation of the level of non-performing loans and to some macroeconomic and banking factors through the multiple linear regression, where non-performing loans are taken as a dependent variable and macroeconomic and banking factors as variables independent.