Do Lending Standards Matter for Non-Financial Corporate Credit? Evidence from Albania

Meri Papavangjeli, Lorena Skufi and Adam Gersl

No 2026/04, Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies

Abstract: This study investigates the relationship between lending standards and credit dynamics in Albania. Using a unique bank-level dataset from the Bank Lending Standards Survey, we differentiate between newly issued domestic-currency and foreign-currency loans to non-financial corporations. We construct a quantitative index of lending standards using detailed bank-level and macro-financial data. The analysis reveals that tightening internal credit criteria, driven by macroeconomic uncertainty, regulatory constraints, or risk aversion, significantly reduces new business lending, weakening bank–firm relationships. In addition, we assess the role of monetary and macroprudential policies, finding that policy changes affect domestic-currency and foreign-currency credit differently, amplifying the impact of supply-side tightening. Firms face limited ability to offset these constraints through alternative lenders, reflecting low substitutability in the Albanian credit market. The effects of tightening are persistent and intensify during economic stress, yielding important implications for monetary transmission, macroprudential policy effectiveness, financial stability, and crisis resilience in small, bank-based economies.

Keywords: Corporate credit growth; lending standards; credit supply shocks; bank lending behavior; firm financing (search for similar items in EconPapers)
JEL-codes: C33 E44 E51 G21 G32 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2026-05, Revised 2026-05
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ies.fsv.cuni.cz/en/en-do-lending-standards ... dit-evidence-albania (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fau:wpaper:wp2026_04

Access Statistics for this paper

More papers in Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies Contact information at EDIRC.
Bibliographic data for series maintained by Natalie Svarcova ().