Measuring the Effect of Covid-19 on Bank Lending: Empirical Evidence from Albania - Economicus

by, Monika Kolleshi & Prof. Dr. Anilda Bozdo

Abstract

This study aims to empirically contribute to the identification and evaluation of microeconomic and macroeconomic indicators at the level of lending in Albania. It identifies a number of important factors, such as the level of gross domestic product, return on assets, unemployment rate, inflation rate, non-performing loans rate, capital adequacy, liabilities and regulatory capital to assets risk weighted. Quantitative analysis and econometric models will study the quantitative impact of each of these factors on both the level of net credit stock and the level of new credit. The creation of these 2 econometric models will serve us to measure and evaluate the changes encountered in the dependent variable over a given period of time, as a result of shocks from other variables. Also, a current and important contribution to this thesis relates to the impact assessment of COVID-19. In order to maintain the simplicity and usefulness of the model, some realistic features of the current economy have been left out, such as the level of loan repayment etc. The study period is from the first quarter of 2009 to the fourth quarter of 2020. The data used were obtained from the Bank of Albania and the Albanian Association of Banks, which were presented in the form of a time series. Despite the limited number of data considered regarding the impact of COVID-19 as well as their temporal distribution, this study with the work it performs, serves as a good starting point for further studies in this field.

How to cite: Kolleshi, M., & Bozdo, A. (2021). Measuring the effect of covid-19 on bank lending: Empirical evidence from Albania. Economicus, 20(1), 101–120.

https://doi.org/10.58944/tegl4439