Albania continues to remain a mostly cash-based economy. The Bank of Albania has raised concerns that our country is one of the last in the region and in Europe to move away from cash and focus more on the banking sector.
According to the Governor, this is a significant problem as it promotes informality.
“This is reflected in a high use of physical cash in the Albanian economy.
“There are empirical studies conducted by the Bank of Albania in collaboration with the World Bank and it results that the use of cash in the economy beyond the attenuating effects of the Bank of Albania mechanisms to maintain price and financial stability and economic development, there is an additional specific cost of using cash as a means of payment that amounts to more than 1% of GDP at the economy level.
“Moreover, the use of physical money can also be considered as a driver of informality in the economy,” said Gent Sejko.
According to the data, in Albania, cash represents about 20% of the total money being circulated in Albania, while according to the European Bank, the money outside of banks in the Eurozone equate to only 9.2%.
North Macedonia and Serbia also have lower cash use than Albania, with 7.4% and 6.8%, respectively.
Finance Minister, Anila Denaj, stressed that the focus remains on Anti-Informality action, which will bring improvements through the fiscalization process.
“The Ministry of Finance aims to reform the way we do business and to bring to attention a more effective working style in respect to the tax administration.
“A little earlier when discussing objectives, I mentioned the element of reducing corruption, which is a permanent objective,” said Denaj.
The statements were made during a meeting of the National Payment System Committee, organized by the Bank of Albania, aimed at boosting economic stability in the country.
The financial culture of Albanian citizens also has an impact on the use of cash within the country, given that there is a lack of trust as well as understanding of the banking system.