Session
Information Systems and Security
Description
The booming lending period and many lenders (16 banks and 21 non-bank financial Institutions in Albania) brought about unprecedented competition in credit markets within Albania. Economists usually view lending and competition favorably, but in Albania resulted in a number of unforeseen non-performing loans. Findings report increased problems of borrower over-indebtedness, reduced loan repayment incentives, and growing debts for lenders (Campion 2001; McIntosh and Wydick 2005). The weakening performance of lenders is due in part to the absence of information sharing in these markets. Because growing numbers of lenders (banks and non-bank financial Institutions in Albania) increase the level of asymmetric information between lenders, credit information systems (often called credit reporting bureaus or credit bureaus) can play a crucial role towards improving credit market performance and, in turn, credit access for the poor. Increases in formal sector lending among the poor have created a need for credit information systems that provide potential lenders with borrower information. Improved screening affects from the system causes the level of non-performing loans to decline. In this paper we will present effects of a credit information system to be implemented in Albania.
Keywords:
Credit information system, credit score, credit history, non –performing loans
Proceedings Editor
Edmond Hajrizi
ISBN
978-9951-550-14-7
First Page
190
Last Page
195
Location
Durres, Albania
Start Date
7-11-2015 9:00 AM
End Date
7-11-2015 5:00 PM
DOI
10.33107/ubt-ic.2015.110
Recommended Citation
Çinaj, Valbona and Ruseti, Bashkim, "Credit Information System in Albania" (2015). UBT International Conference. 110.
https://knowledgecenter.ubt-uni.net/conference/2015/all-events/110
Credit Information System in Albania
Durres, Albania
The booming lending period and many lenders (16 banks and 21 non-bank financial Institutions in Albania) brought about unprecedented competition in credit markets within Albania. Economists usually view lending and competition favorably, but in Albania resulted in a number of unforeseen non-performing loans. Findings report increased problems of borrower over-indebtedness, reduced loan repayment incentives, and growing debts for lenders (Campion 2001; McIntosh and Wydick 2005). The weakening performance of lenders is due in part to the absence of information sharing in these markets. Because growing numbers of lenders (banks and non-bank financial Institutions in Albania) increase the level of asymmetric information between lenders, credit information systems (often called credit reporting bureaus or credit bureaus) can play a crucial role towards improving credit market performance and, in turn, credit access for the poor. Increases in formal sector lending among the poor have created a need for credit information systems that provide potential lenders with borrower information. Improved screening affects from the system causes the level of non-performing loans to decline. In this paper we will present effects of a credit information system to be implemented in Albania.