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Aim: The aim of the paper is to assess the impact of corporate financing structure on economic growth in Albania, given the dominance of the banking sector and the lack of a developed capital market. The paper combines the theory of economic growth with the analysis of business financing in a transitional economy. Methods: The study was based on a literature review and desk research analysis of official data from the Bank of Albania for the years 2020–2024. It considered loan structure by public and private
financial and non-financial sectors, as well as the currency structure of loans. Results: The results indicate that debt financing, especially in the banking sector, remains the main source of capital for companies, with a simultaneous lack of alternative capital market instruments. This phenomenon may limit economic growth potential, consistent with endogenous growth theories that emphasize the importance of access to diversified sources of capital. Conclusions: The study concludes that the Albanian financial system is dominated by banks, with limited financial instruments for businesses to diversify their capital structure. There is a need for policies that promote the development of a capital market to ensure sustainable financing options for businesses and reduce excessive reliance on debt. Developing the capital market in Albania is necessary to diversify financing and strengthen the economy’s resilience to external shocks, which would support long-term GDP growth.
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