Universal Journal of Accounting and Finance Vol. 9(5), pp. 1058 - 1066
DOI: 10.13189/ujaf.2021.090516
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Covid-19, Business Failure and Bank Loan Collapse: Albanian Case

Romeo Mano ^1,*, Armela Anamali ¹, Bitila Shosha ^2
1 Department of Mathematics, Informatics and Physics, Faculty of Natural Sciences, University “Eqrem Çabej” Gjirokastër, Albania
² Department of Finance and Accounting, Faculty of Business, University “Aleksander Moisu”, Durrës, Albania

ABSTRACT

Purpose. The purpose of this paper is to make an analysis of challenges to private sectors repaying bank loans during and after lockdown restrictions imposed by Albanian government due to Covid-2019 pandemic, and their prospects for bank lending. Design/ Methodology/ Approach. This paper uses a mixed methodology. To collect primary data, we distributed online questionnaires to a number of Albanian firms. The sample collected is a probability sample of business population operating in Albania. The data collected are subsequently processed with the inferential statistical methods using SPSS version 21. Findings. This study identifies and examines the impact of Covid-19 on businesses that have taken credits during the pre-pandemic period. The results indicate that the risk of deferring loan repayments depends on businesses age, i.e., years of operating in the market, and the use of cash reserve funds of business. The need for liquidity and the perspective shows that firms are reluctant and not sure whether to opt for a bank loan. The factors influencing their decision in this regard are government policies, interest rates and uncertainty in the future. Originality/value. By analyzing the relationship between two important pillars of the domestic economy, this paper represents a novelty. Albania is a developing country and this study would help in future research both for Albania and other similar countries. The findings of this paper can also be used as a baseline for a future forecast model. They could help in analyzing private sector credits in a new socio-economic and geopolitical era caused by Covid-19 pandemic.

KEYWORDS
Covid-19 Pandemic, Private Sector, Bank Loan, Interest Rates, Government Policies

Cite This Paper in IEEE or APA Citation Styles
(a). IEEE Format:
[1] Romeo Mano , Armela Anamali , Bitila Shosha , "Covid-19, Business Failure and Bank Loan Collapse: Albanian Case," Universal Journal of Accounting and Finance, Vol. 9, No. 5, pp. 1058 - 1066, 2021. DOI: 10.13189/ujaf.2021.090516.

(b). APA Format:
Romeo Mano , Armela Anamali , Bitila Shosha (2021). Covid-19, Business Failure and Bank Loan Collapse: Albanian Case. Universal Journal of Accounting and Finance, 9(5), 1058 - 1066. DOI: 10.13189/ujaf.2021.090516.