“BANK LENDING, A SIGNIFICANT EFFORT TO FINANCING SME’’

Abstract

The SME’s sector in Albania plays a significant role in the national economy. As we know SME’s remain the main sectors
who generate jobs, innovation and economic development. One of the main problem that a business in early stages of
transition was to provide the necessary capital to start a private activity, to expand and strengthen it. For the private sector
is very important to get the capital ate the moment thy needed it. Bank lending, initially was at low levels, but gradually
began to turn into an important tool that encourage the development of a country; supports new manufacturing investment in
the economy, increased the activity of production, trade and services. Although the general trend of credit over the years
has been growing, but the rhythm has been low and that do to limited expertise in the banking business, resulting in the
increase of bad loans. Business financing comes from two main sources: mikro-loans to family business through loans to
businesses and foundations through formal banking system. This paper gives details at performance of Bank lending, but it
also highlights many problems dealing with lending in business sector.