Zamira VEIZI, Robert ÇELO, Irena BOBOLI & Drita LUZO

Abstract In the recent years a high growth of nonperforming loans is noticed in Albanian banking system mainly as a result of the global financial crisis and due to external and internal factors. In this paper we will address two important problems: The first has to do with the quality of the loan portfolio and the second has to do with the identification of causes that have led to an increase of non-performing loans. The main objective of this paper is to explain how and why non-performing loans have effect negatively in the economic growth of our country. Also we will explain what the legal requirements are and challenges related with the solution of the problem of NPL in our country and will be highlighted some preventive and corrective measures to be taken to reduce non-performing loans.
Key words non-performing loans, Albanian banking system, loan portfolio, economic growth, challenges.
JEL classification E44, G21, E51, F34, G11