The preference to save savings outside the banking system increased rapidly during the period 2019-2020, according to a survey conducted by the Central Bank of Austria (OeNB-Euro-Survey) in Southeast European countries, including Albania.
In Albania, approximately 40% of those who had saved preferred to keep them out of the banking system. The choice to keep savings outside banks marked a rapid increase compared to the survey conducted for the period, 2017-2018, where only 26% of persons with savings preferred to keep them outside banks.
The tendency to keep savings outside banks has increased in the last four years, also due to the low interest rates offered by banks. According to the Survey, Serbia is the country with the highest preference to keep savings outside banks. During 2019-2020, about 52% of people with savings have stated that they prefer to keep them out of banks.
Romanians and Croats also have a high percentage of distrust, with 42% and 44% of savers, respectively, preferring to administer them outside banks.
Czechs and Bulgarians are more likely to trust banks, as they have a much lower percentage than the average of Southeast European countries of those who prefer to keep their money out of banks.
Experts of the Central Bank of Austria, analyzing the phenomenon, say that the lack of confidence in the banking system (in particular a perceived lack of deposit security) is a key factor in explaining the strong preference of individuals to keep savings at home.
Moreover, weak institutional frameworks, e.g. Poor quality of law enforcement and a low penetration of banks in rural areas are important factors that explain the choice for cash.
The tendency to keep cash savings in Albania has materialized with the increase of money circulation outside banks.
At the end of 2020, ALL 344 billion (EUR 2.8 billion) were circulating outside the banking system, according to statistics published by the Bank of Albania. Historical data show that in 2020, the strongest annual growth was recorded, at ALL 53 billion, or + 18%, since 2002, when the Bank of Albania reported this indicator.
In relation to total money, outside the banking system at the end of December 23.6% of the total (from 22.1% in December 2019). This is the highest level since December 2008, when a wave of deposit withdrawals was recorded at the time, as a result of fears caused by the global financial crisis.
The level of money outside banks of almost 24% of the total is much higher than the average of the European Union and the region. In the Eurozone, according to data from the European Central Bank, the level of money outside banks was about 9% of the total. Even in the region this indicator is lower than 10 %./Monitor
