investments, like: franchise, private equity funds, Venture Capital, mutual investment funds, hedge funds and infrastructure funds. Although many years have passed since the collapse of pyramid schemes, their consequences are still felt around, mostly to those individuals over the age of 50. To overcome such obstacles more needs to be invested in educating individuals about banking culture, as there is no time to think about the past and make allusions on the future for factors that do not depend on us, instead we have to react to the opportunities and potentials we have, to ensure a secured financial future. In developing financial markets, an important role is played by the country's demographics. The demographic situation in Albania is favorable to the development of financial markets, as the average age of population is 34.7 years, thus offering a market with high potential for alternative investments. Individuals up to 35 show a high demand mortgage loans products and investments, to ensure their own livelihood. During the age 35-50 the highest wealth density is reached and individuals seek to invest these funds with the aim to ensure a guaranteed income during their third age. Here comes the moment when alternative forms of investments get priority, despite the fact that, in the mid-term, businesses will continue to widely use the banking system for funding and individuals will choose banks to invest their funds. Some banks operating in the market cannot offer a complete service package to their clients, like: e-banking, etc. Under current conditions, when banks possess high amounts of excess liquidity, a slower growth rate for gross domestic product will negatively affect their financial results, as the high amount of liquidity at banks is an opportunity cost, i.e. an absent profit. Gross domestic product is strongly correlated with financial results, as it means that the higher incomes for individuals and households and the more disposable funds they have for paying loan installments and investing their savings after consumption. In Albania the political influence on business climate remains a real concern, yet. This creates uncertainty for businesses to invest in long-term projects. Such business’ uncertainty is therefore transmitted to financial institutions, as it means uncertainty in maintaining the pace of business turnover for companies and a shift in the political climate will reduce income expectations, by increasing business liquidity problems to
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creditors, as well as would feed the increase of non-performing loans, which remains a concern not only in the region, but also in the European Union. The development of capital market and other alternative investment forms must be accompanied with an education process on financial literacy for businesses and individuals. Given the Albania’s potential, the European economy’s developments and the advantage the young population does represent, an added value are young people who have studied at best universities abroad, who can integrate their experiences. Banks could and should be oriented towards consultancy on alternative investments for individuals. Also, the establishment of a stock exchange will have a positive impact on increasing markets’ efficiency, which in turn would increase the formalization of economy and the absorption level of financial investments. The creation of a common market with Kosovo would produce a positive impact on maintaining the currency’s stability. Start-up and Venture Capital funding through direct participation in the stock capital is one of the most efficient forms of financing for businesses which seek capital for starting a
business, or to develop it. The same applies to real estate investments that are aimed at improving urban and underdeveloped areas. Albania offers a high potential for investments in infrastructure, such as: highways, railways and airports, which is a form of direct economic support, and this will be of great importance for the economy, as it will facilitate public spending and increase competition among companies. Banking system’s participation in such investments would be an advantage for all stakeholders. These investments require high amounts of capital and, in terms of efficient, they would call for a much more transparent and merit-based system, otherwise costs and negative effects on the economy will be significant. Alternative investments’ development will also promote the growth of remittances from Albanians working abroad. Alternative investments are the best option for banks to invest their excess liquidity, thereby avoiding large exposures. Alternative investments require specific knowledge in the field of finance, as well as and managerial skills, and in this regard, it is deemed as essential the presence of the banking system as an intermediary, consultant and strategic partner.