Albania, a nation with a rich tapestry of culture and history, grapples with a stark reality mirrored in its banking sector – a profound contrast between social strata, with potential far-reaching social and economic ramifications. Recent data from the Deposit Insurance Agency (DIA) sheds light on the astonishing divergence within the country's banking landscape, revealing a dichotomy that raises significant concerns.
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| Illustration of the separation of two social classes through a crack in the middle, the rich and the rest |
At the close of 2023, individuals in Albania held a total of 2.66 million bank accounts, safeguarded by the DIA. Within these accounts lay a staggering sum of 1.2 trillion lekë. However, a disconcerting revelation surfaces upon closer examination – a significant portion of these accounts remains dormant, with balances ranging from 0 to 100 lekë. Specifically, out of the total accounts opened by individuals, approximately one-third, totaling 898,348 accounts, remain empty, comprising around 34% of all individual bank accounts, as Monitor reports.
The disparity in account activity extends further, with a substantial number of depositors maintaining modest balances. According to the DIA, 1,646,547 individual depositors, constituting 61.8% of the total, possess deposits ranging from 100 lekë to 2.5 million lekë, the threshold for deposit insurance coverage. These deposits, which are fully insured by law, amounted to 509.6 billion lekë or 42% of all insured deposits.
In sharp contrast, a mere fraction of depositors exerts remarkable control over the bulk of savings in banks. A minuscule 4.5% of total depositors, comprising 119,623 individuals, lay claim to nearly 58% of the total deposits. Astonishingly, their combined deposits amounted to a staggering 698.6 billion lekë.
The concept of insured deposits offers a semblance of security, yet the concentration of wealth within a select few raises pertinent questions about financial inclusivity and equitable distribution of resources. Despite the assurance of deposit insurance, a significant portion of the population remains economically marginalized, unable to capitalize on banking services effectively.
It is imperative to note that the growth of insured deposits paints a picture of stability on the surface. By the end of 2023, insured deposits, totaling 1,511.2 billion lekë, represented 94% of all deposits, marking a 6% increase from the previous year. However, the disparity in the distribution of these deposits underscores underlying socioeconomic disparities.
Individuals' insured deposits, amounting to 1,208 billion lekë, form the lion's share, comprising 80% of all insured deposits. Notably, deposits in lekë hold the largest proportion at 48%, followed closely by euro deposits at 46%.
The implications of this stark contrast in the banking sector extend beyond mere numbers. Such inequality has the potential to exacerbate existing social divisions, hinder economic mobility, and perpetuate cycles of poverty. Addressing these disparities necessitates comprehensive strategies aimed at fostering financial literacy, promoting inclusive banking practices, and ensuring equitable access to financial resources.
In conclusion, while Albania's banking sector reflects elements of stability and growth, the widening chasm between social strata underscores pressing challenges that demand attention. Achieving a more equitable and inclusive financial landscape is not only a matter of economic imperative but a moral imperative as well, essential for fostering sustainable development and prosperity for all Albanians.