Loans weigh on Albanian households: 1 in 4 borrowers spends over 30% of income

Lending is weighing more heavily on Albanian households. Even though the number of indebted households has fallen, one in four borrowers now spends more than 30% of monthly income on loan installments.

Households with bank loans say the installment burden on income is relatively high. According to the Bank of Albania’s latest survey, 24% of them report that loan payments take more than 30% of their monthly income.

This burden is growing, while the share of households spending less than 30% of income on installments has shrunk.

Currently, 33% of borrowing households spend up to 10% of their income on loans. 43% pay between 10 and 30%, while 24% exceed the 30% threshold.

The Bank of Albania estimates that households’ ability to pay weakened somewhat during the first half of the year.

Still, expectations for the coming months are more stable. 70% of borrowing households do not expect any change in their ability to repay their loans.

Demand for new loans also remains moderate. 62% of households say they do not expect to take out credit in the next six months. The survey was conducted on a sample of 1,200 households, with a response rate of 89%.