ALBANIA
INTRODUCTION
The factoring of accounts receivables in Albania is regulated
by law No 9630, dated 30 October 2006 regarding ‘factoring’.
The Bank of Albania is the supervisory authority that
includes factoring activities and which in 2012 recorded
a continuing upward trend for licence applications by
non-bank financial institutions. It is worth noting that
2010 marked the entry into the market of the first nonbank financial institution offering factoring. Specifically
it was the Albanian Factoring Services sh.a. (AFS) which
applied for and was granted a licence by the Bank of
Albania for operating as a non-bank, financial institution
engaged in factoring.
Gert Peshkatari
General Manager
Albanian Factoring Services (AFS)
SH.A
AFS is the first and only licensed company that facilitates
international factoring.
Annual Real GDP Growth Rates
8.00%
7.54%
7.00%
6.00%
5.00%
4.00%
3.08%
3.77%
3.00%
3.31%
1.50%
2.00%
1.00%
0.00%
2008
2009
2010
2011
2012
Source: Albanian Factoring Services (AFS) SH.A
These days liquidity seems to be the main driver that forces
businesses to either succeed or fail. Commercial banks have
tightened their credit lines as well as other forms of credit
for companies as a result of the economic environment in
both the local market and in the region. Risk seems to be the
most common word used in the financial sector. In such an
environment we are certain that most businesses are finding
it very difficult to access the necessary financial means
in order to improve their cash flow and further develop
business plans. This is exactly where the factor comes into
play. Being extremely flexible and efficient when evaluating
local companies the factor can offer the necessary financial
means in a very short period of time. Our conditions are
among the most favourable in the financial market and we
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ALBANIA
guarantee that factoring will ease the way our clients do
business and will definitely reduce costs.
INDUSTRY ENVIRONMENT
The financial system and the banking sector’s situation and
performance remained stable throughout the period. Both
the factoring and the financial services sectors operated
within a more challenging environment, characterised
by slow domestic and foreign economic growth, reduced
public financial stimulus, slower investments and public
consumption, decreased bank lending rates and quality,
as well as imposed structural changes in the inter-bank
liquidity market. However the factoring market generated
income and presented good capitalisation and liquidity
indicators over the period. The direct impact of market
risks on the factoring sector was moderate, but the indirect
impact arising from the weak exposure of businesses was
significant, suggesting the need for prudential monitoring
by the factoring companies. The deterioration in credit
quality represents the main concern affecting the stability
of the sector’s financial indicators. As Albanian and foreign
economic developments do not reveal any improvements in
business expectations, credit quality improvement may not
occur in the short-term and then only through the smooth
operation of the financial institutions.
cent respectively. Postal services, telecommunications
and transport declined as well. Other services and trade
continued to contribute positively to economic growth by
11.1 per cent and 5.3 per cent respectively. Agriculture grew
four per cent at the beginning of 2011 and slowed to 1.6 per
cent at the end of 2011.
Negative developments in the Eurozone and in our own
region continue to impact negatively on Albania’s economy.
The weakening of economic activity in Europe will continue
to provide an adverse impact on exports, while lower
inflationary pressures may contribute to lower import prices.
Main Partners; Import Year 2012
27%
32%
2%
2%
3%
3%
9%
4%
6%
Italy
Germany
Switzerland
France
The financial institutions should continue improving credit
monitoring to:
6%
6%
Greece
Turkey
Russian Federation
Others
China
Serbia
Spain
Source: Albanian Factoring Services (AFS) SH.A
■
strengthen respective structures for assessing both a
customer’s creditworthiness and for collection rates;
■
proactively create provisions to hedge against credit
risk;
■
recognise the financial effect of losses, write them off
from the balance-sheet in a timely manner and execute
guarantees for recourse services.
If these operations are performed correctly and professionally,
they will provide the financial sector with resources to better
support financing in the periods ahead.
Addressing non-performing loans is important to the
financing pace and future contribution of the financial
system to Albania’s economic development.
In 2012 the economy contracted by 0.2 per cent year-onyear and 1.2 per cent quarter-on-quarter. The industrial
and construction sectors saw a significant deepening
in their annual contraction, 19.3 per cent and 17.6 per
2
Values of Imports in Euros (millions) consist of the
following:
Year 2012 by months + Values of Imports
(€ m)
400
350
300
250
200
150
100
50
0
Source: Albanian Factoring Services (AFS) SH.A
ALBANIA
Structure of Imports by EU/Non-EU Countries:
Import Volume EU/non EU Year 2012
loans, concentrating more in medium-term loans. Small
enterprises reduced their share of long- and medium-term
loans, increasing the share of long-term loans. Mediumsized enterprises focused mainly on short-term loans.
Structure of Exports by EU/Non-EU Countries:
37.80%
Export Volume EU / non EU Year 2012
24.50%
62.20%
Non EU
EU
Source: Albanian Factoring Services (AFS) SH.A
Values of Exports in Euros (millions) consist in the
following:
Year 2012 by months + Values of Exports
(€ m)
160
140
120
100
80
60
75.50%
Non EU
EU
Source: Albanian Factoring Services (AFS) SH.A
By maturity term, during the period under review, shortterm loans contributed positively by about Albanian LeK
(ALL) four billion (EUR28.3 million - up two per cent) to
the growth of loans, while long-term loans contributed by
about ALL6.8 billion (EUR48.1 million - up 2.7 per cent).
On the other hand, medium-term loans fell by ALL five
billion (EUR35.3 million), or 4.4 per cent.
40
20
0
Source: Albanian Factoring Services (AFS) SH.A
In 2012, business credit growth rates slowed down
persistently. In June lending to businesses expanded by 11.9
per cent year-on-year, against 16.6 per cent in December and
14.3 per cent 12 months earlier.
By business category, small enterprises’ loans surged,
whereas medium-sized enterprises’ loans decelerated. Large
enterprises’ loans slowed down slightly, thus reducing
significantly the share of long-term and short-term
By sectors of economy, loans were mainly extended to
trade, construction, industry and production of electrical
energy, while lending to other sectors recorded modest
growth. In relative terms, during the period under review
lending to the education sector, extractive industry and
hotels increased by about 22 per cent, 22 per cent and 12.3
per cent respectively due to seasonal effect. Lending to the
agricultural sector contracted by ALL0.7 billion (EUR4.9
million) or 11.8 per cent.
By purpose of use, lending to businesses was mainly oriented
towards the purchase of equipment. Overdrafts continue to
dominate and their size remains above the five-year average,
despite showing a slight downward tendency. No structural
changes are noted in lending to households, with real estate
investment loans having the major share.
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In 2012 the distribution of new loans to businesses by
purpose of use shows that new loans shifted towards working
capital loans.
MARKET PERFORMANCE AND SUPPLY
Non-bank financial institutions are licensed and supervised
by the Bank of Albania. Factoring companies are considered
as non-bank financial institutions and this sector continues
to share a small weight in the total financial system. The
total non-bank financial sector’s assets account for about
6.1 per cent of the financial system, higher than the 5.3 per
cent recorded at end-2011. This increase is the result of new
entrants into the factoring market during the period under
review. At the end of the period, non-bank financial sector’s
activity as a percentage of GDP was 5.6 per cent.
Lending activity is the main share of business transacted
within the non-bank financial institutions, accounting for
60 per cent of total assets. Despite recording positive growth
rates, the loan portfolio has maintained a downward trend
since 2010.
At the end of the period, the financing portfolio as a
percentage of GDP was 43.5 per cent. Funds outstanding
maintained sluggish growth rates due to the weak demand
for loans and tight lending standards.
Market Share by Service 2012
25%
75%
Domestic Factoring
International Factoring
factoring 25 per cent. The aim is to expand activity
internationally by offering export and import factoring,
and in the near future to become members of both Factors
Chain International and the International Factors group.
Interest Rates on New Financings
During 2012 H1, interest rates on new loans denominated
in the three major currencies dropped slightly. Interest rates
on new Albanian Lek loans showed negligible fluctuation.
Less favourable lending standards on new business loans
were applied to overdrafts. Average interest rates on new
overdrafts increased by about 0.45 percentage points to
10.89 per cent.
Over the same stated period, the average interest rate on new
USD loans dropped to 6.88 per cent, about 1.01 percentage
points lower than in 2011 H2. This fact favoured new
overdrafts, with the average interest rate dropping by about
2.11 percentage points to 6.31 per cent. The downward trend
of the interest rate on new USD loans may have contributed
to a higher demand for this type of loan. During the same
period the average interest rate on Euro loans dropped by
about 0.25 percentage points to 7.25 per cent. This drop
may have been driven by the performance of average Euribor
rates in the international markets, which dropped by about
0.6 percentage points over the period under review.
The correlation between new loans by sectors of the
economy and the respective interest rate is assessed through
the analysis of the respective correlation. Concerning the
business sector, there is a negative correlation coefficient
during the entire period reflecting the indirect correlation
between new loans and the interest rate. However the rising
trend of this correlation from June 2011 for new working
capital and real estate investment loans is a reflection of the
banks’ tendencies to reduce lending for these purposes and
the increase in the respective interest rates. The downward
trend in the correlation coefficient for overdrafts is a result
of the banks’ tendencies to reduce lending for overdraft
purposes and also its cost. Lending for equipment purchase
has also declined; however its interest rate continues to
maintain a rising trend.
Source: Albanian Factoring Services (AFS) SH.A
Factoring has been fully operational for almost one and a
half years and the portfolio at the present time is made up
as follows: domestic factoring 75 per cent and international
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Correlation between New Financings and Portfolio Quality
As at the end of 2012 the performance of new loans
reflected the banks’ tendencies to support businesses with
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lending at a time when lending to households shrank.
Out of the total of new business loans, 37.3 per cent
was extended to trade, repair of vehicles and household
appliances; 16.3 per cent to the construction sector; and
6.7 per cent to the processing industry.
We can assume that international factoring will grow in
view of Albania’s export strength and this creates huge
potential. On the other side, the domestic market also offers
considerable potential if we continue to position factoring as
an alternative to bank credit or as a supplement to financing
by banks.
With regard to clients, over half of the domestic purchased
receivables outstanding on 31 December 2010 were located
in the Albanian capital, and the main economic sector
using factoring continued to be private enterprises. The
main industry sectors for factoring were manufacturing,
wholesale and retail trade, energy and service providers,
In terms of debtors, the public sector accounts for an
important part of the domestic purchased receivables
outstanding on 31 December, but this is still far from the
potential for this sector.
Main factoring products offered consist of:
1.
Full factoring
2.
Invoice discounting
3.
Non-recourse factoring
4.
Reverse factoring
5.
Accounts Receivables Management etc.
FUTURE TRENDS
In implementing their strategies, factoring companies
are seeking to provide additional financial activities,
new products and services. Applications for approval of
additional activities and other factoring products are based
on the Bank of Albania’s legal provisions and regulations.
The number of Albanian companies using factoring has
significantly increased over the past year. Most Albanian
firms are small or medium size enterprises, family owned,
with a high reliance on trade credit and debt and an
intensive use of financial leverage, mainly in the form of
short-term loans by banks.
Changes to the legislative and regulatory framework
led to a significant and progressive adjustment in the
factoring supply.
The financial system in Albania is subject to very extensive
regulation which covers many aspects of the sector, that is
prudential supervision, anti-money laundering regulations,
transparency of bank-customer relations etc. The ongoing
changes in Albanian regulation for financial companies,
especially with regard to requirements that must be fulfi lled
in order to offer financial services, may lead to significant
changes in the supply structure in the future.
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Factoring Products and Services
Produkte Factoring dhe Shërbimet
During 2012 the factoring business that fi nances small
and medium enterprises has shown significant growth
rates. According to data provided by local operators,
the percentage increase compared with the previous
year is more than 60 per cent. Factoring, as one of
the newest fi nancial services in the market and being
provided by non-bank fi nancial institutions, started
operations only 3-4 years ago. Until 2012 there were
only two companies operating in the market but the
number is increasing this year. According to specific
needs, a factoring company can offer services including
domestic recourse factoring, domestic non-recourse
factoring, import-export international factoring,
accounts receivable management etc. The Albanian
factoring market is mainly concentrated in domestic
recourse factoring and is valued at approximately Euro
nine million versus Euro 3-4 million in 2011.
Biznesi i faktoringut që fi nancon faturat e bizneseve
kryesisht të vogla dhe të mesme, ka regjistruar shifra
të larta rritjeje gjatë 2012. Sipas të dhënave nga
operatorët vendas, rritja në raport me vitin 2011
është mbi 60%. Factoring një nga shërbimet më të reja
fi nanciare jobankare në vend, nisi të operojë vetëm 3-4
vite më parë. Deri në 2012 kanë operuar dy kompani,
por numri i tyre është rritur edhe më shumë këtë vit.
Në varësi të nevojave, një shoqëri factoring mund
të ofrojë shërbimet: factoring vendas me garaci, pa
garanci, factoring për eksport-import, arkëtim apo
shlyerje faturash, etj. Aktualisht në tregun shqiptar
ofrohen shërbimet e factoring-ut me garanci. Tregu
i faktoringut në Shqipëri vlerësohet të ketë arritur
tashmë në 9 milionë euro, kur në vitin 2011 ishin në
nivelet 3-4 milionë euro.
ALBANIA
DIRECTORY OF FACTORS IN ALBANIA
Company & Website
Address
Contact & Email
Tel. & Fax
Albania Factoring Services Sh.A.
Rruga “Abdyl Frashëri”
Pallati Hekla
kati 2
Tiranë
Gert Peshkatari Director
T: +355 4 2254057
F: +355 4 2400359
Balkan Factors Albania SH.A.
Rruga “Perlat Rexhepi“
pallati Edil-Al
kati 1
Tiranë
Aida Nani
Director
Panagiotis Papatheodorou
T: +355 4 4814771
Omnifactor SH.A.
Rruga “Vaso Pasha“
pallati 13/1
kati 2
Tirana
Genci Kushta Director: T: +355 4 2222413
Profactoring Albania SH.P.K. Bulevardi “Zogu I Parë”
Qendra e Biznesit VEVE
kati 1
Tiranë
Endrit Beqaj
Director:
T: +355 4 2243499
F: +355 4 2272678
M: 0682021639
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