As the microcredit market in Albania continues to shake from the consequences of sensational fraud scandals, while the main actors of this sector continue to collect stratospheric profits.
The ECFA company, widely known to the public as Kredo, closed last year with a net profit after taxes of 593.2 million lek or 6.3 million euros, ranking among the two microcredit companies that apply the highest interest rates in the country. But also proving that the business model based on the extortion of citizens continues to remain extremely profitable.
The great MCA scandal two years ago seemed to finally shake the foundations of this uncontrolled market, but the reality shows that commercial microcredit structures continue to operate with the same predatory philosophy where ECFA itself finances its activity with loans with an interest of about 13.5 percent per year secured by banks, shareholders or through the issuance of bonds, which are then given as loans to citizens with even higher interest.
Faced with successive denunciations of fraudulent schemes and extortion of borrowers, the Bank of Albania says that it has intervened several times to put the brakes on and the maximum interest on consumer loans was limited to 51.3%.
However, this figure remains very high and the microcredit model continues to rely on salty rates. This approach looks more like a legalization of institutional usury than a real protection for the consumer, implying that the multimillion-euro profits of corporations at the expense of indebted citizens remain one of the worst wounds of the financial market.
