Night loans are closed/ Draft regulation: No lending after 10 pm

Illustrative photo

The new draft regulation of the Bank of Albania for lending by non-bank financial entities tightens the borrowing criteria, in terms of the individuals who apply, as well as the schedule.

Currently, certain microfinance entities have provided 24-hour lending services through automated systems and ATMs located in large urban centers. The Bank of Albania proposes that the lending hours be limited and that no new borrowing contracts be concluded from 10:00 PM to 7:00 AM.

The other restriction is related to the prohibition of lending to persons under 18 years of age, those with disabilities, those under the tutelage of another person, or even to businesses owned by persons who are not allowed to enter into a loan agreement according to these restrictions.

Fast lending has experienced a strong growth in recent years thanks to the eased conditions of their delivery, minimal documentation requirements and speed of approval compared to the stricter conditions of second-tier banks.

However, these facilities have turned into a double-edged sword as lending is offered at higher interest rates and mainly for consumption, which makes it difficult to both pay and collect them in cases of bad borrowing.

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