ARE ALBANIAN HOUSEHOLDS FINANCIALLY FRAGILE?

Abstract

This study investigates financial fragility among Albanian households, measured by their ability to cover unexpected expenses, while analysing the impact of socio-economic factors and asset portfolios. Using data from Albania’s first Household Wealth Survey, we find that 59 % of households lack sufficient liquidity to withstand financial shocks, classifying them as financially fragile. Our multinomial regression analysis reveals three key findings: first, households with more educated heads show significantly lower fragility; second, access to formal financial services enhances resilience; and third, family support networks serve as an important buffer against financial vulnerability. These results demonstrate that both formal financial inclusion and informal family ties play crucial roles in household financial stability. These findings suggest that promoting financial education, expanding access to financial services, and supporting remittance channels can help reduce household vulnerability in Albania.