benefit from credit growth, for as long as and provided that such growth is based on firm structural and institutional premises. it is our common duty not to let this opportunity pass. this conclusion leads me naturally to the precondition i mentioned earlier. the albanian economy offers positive business prospects, coupled with a high crediting potential and reduced credit risk. this reality dictates the need and the possibility for a bolder approach toward crediting. i have had the opportunity to elaborate – on a continuous basis – our standpoint on the economic development perspective. i would like, however, to bring today to your attention again that, in cooperation with the albanian association of banks and the government of albania, we are implementing an ambitious plan of measures for reducing non - performing loans. from a strategic point of view, the objective of this plan was not only to simply clean banks ’ balance sheets, but also to provide for a qualitative improvement of the crediting environment in albania. in this context, the banking industry now has a more adequate legal and regulatory framework on protecting the interests of the creditor, repossessing collateral and executing it, and a more transparent environment for assessing the risk of individual borrowers. on this basis, the bank of albania deems that the banking sector, should : pay additional attention to crediting as a commitment that generates mutual benefits both for it and the albanian economy ; empower internal structures and its analytical and managerial capacities in terms of crediting ; ensure prioritized implementation of outstanding commitments under the plan of measures for reducing non - performing loans ; and, be more vocal and more transparent in identifying obstacles or deficiencies it finds in the crediting environment, both in legal and in regulatory aspects. these recommendations should not be addressed separately from the second challenge. 2. efficient allocation of bank loans as a precondition for sustainable and long - term development increased attention to crediting does not imply merely increased attention to the volume of credit, but also additional attention to its quality. these two aspects are complementary and do not contradict each other in the long run. the history of credit in transition economies, including albania, features some problematic elements which we need to avoid in the future. first, credit has been notably concentrated in non - tradable goods and services, such as residential buildings and services, which are oriented solely – or primarily – toward the domestic market. clearly, this trend reflects, at the same time, the lack of managerial knowledge and capacities in

territory of the country and has introduced bank products and payment instruments in line with global developments in this sector. in brief, the banking industry has contributed to the development of the albanian economy by encouraging savings and generating credit. it has also contributed to the development of financial markets and the expansion of payment instruments, by offering advice and expertise to enterprises and providing for risk diversification in the economy. in return to these contributions, the banking sector – now entirely privately owned – has constantly generated positive returns and has experienced relatively low volatility in its profitability indicators. it has offered and continues to offer a positive business prospect for all investors that have a long - term vision and are dedicated to accompanying albania on its journey toward progress and european integration. 1 / 5 bis central bankers'speeches the banking sector has been and remains the backbone of the financial system and the most professionally avant - garde segment of the albanian economy. i am confident that – irrespective of the trend for expansion and diversification of other segments of the financial market – the banking sector will continue to play a unique role in the near and distant future. in this context, i would like to share with you the vision of the bank of albania on development challenges. 1. credit as an instrument that brings together the interests of both the economy and the banking sector sustainable development of the banking sector requires increased attention to its primary role : transforming savings into financing instruments to the economy. in practical terms, the banking industry should ensure that the credit supply concords in terms of time and diversity to the needs of the economy, while factoring risk in directly and responsibly. before i elaborate on this topic, let me emphasise two key moments. the first moment pertains to a misunderstanding we often encounter in the public opinion, even within the professional discourse, that is the albanian banking sector is not lending. this is not true. our data show that, excluding the accounting effect of the exchange rate and the write offs, the portfolio of bank loans has recorded 6 % annual growth in the last year. moreover, the pace of growth has shown an improving trend, in line with the overall context of the performance of the economy. in parallel, the expansion of the bank loan portfolio has shown a more balanced composition in terms of both the currency structure and the destination of funds. i would also like to underline that the term to maturity of the bank loans portfolio is short, which means that it is renovated frequently. thus, regardless of