Credit helps to improve financial status so that a person can buy homes, get credit cards, and build trust between financial institutions and the consumer. Despite the many benefits to having access to credit, Albania still seems to have a low credit market.
Credit access in Albania is low due mostly in part to a supply-demand mismatch. This means that the creditors in Albania don’t have the products that the people are interested in. As a result of this mismatch, the supplier tends to change their product or becomes forced to go out of business.
Part of the reason why the country’s credit access is in a supply-demand mismatch is because some parts of the country have easy access to credit and a reliable supplier, while poorer parts of Albania do not.
Individual Albanian people’s credit access seems threatened by the lack of borrower awareness and protections, as well as a lack of a functioning credit registry. Without these two things, a person is left vulnerable to financial debt and burden that can last years.
Credit awareness is important because it poses as a financial risk for those who cannot afford it. If one is not careful, they can end up with massive debt. Debt hinders the chances of acquring a house, car, or financing any other prosperous items.
According to the World Bank, while individual access may be threatened, cooperate business account for 74 percent of all credit in Albania and small businesses account for majority of the economic population. Though credit access usually reflects the economic stability of a country, Albania relies heavily on cooperations.
For cooperate companies, credit access is important because credit helps businesses receive the funding they need to succeed financially. According to Cardhub in 2015, the average business needs 12-18 months to improve its business credit score.
By improving credit access in Albania, financial status is sure to improve as a result. Albanian credit access can further smart banking and loaning so that the country can decrease their economic expenses.
– Seriah Sargenton