Methods of Payment
Standard international methods of payment are used in North Macedonia. For shipments of goods, advance payment is the most commonly used method; credit terms are usually used in long-established relations with known customers. Credit is allocated on market terms and usually ranges from 30 to 90 days. Letters of credit and bills of exchange are used in shipment payments. As with any international transaction, the method of payment is determined by the degree of trust in the buyer’s ability and willingness to pay. Full payment in advance is highly recommended for the first few transactions and deliveries while the importer is still unknown.
The debt collection process is time-consuming, expensive, and complex. There are number of collection agencies. A creditor may choose to sue the debtor in court; if the court rules in favor of the creditor, the creditor may engage a licensed enforcement agent to collect its due receivables.
For more information about the methods of payment or other trade finance options, please read the Trade Finance Guide.
Banking Systems
The financial system in North Macedonia consists of the National Bank of the Republic of North Macedonia (NBRNM), commercial banks, financial companies, savings houses, exchange offices, the Deposit Insurance Fund, insurance companies, pension funds, investment funds, brokerage firms, and a stock exchange. The banking system itself is two-tiered, based on the Banking Law and the National Bank Law. NBRNM is the independent money-issuing institution responsible for price stability, stability of the national currency (denar), stability of the financial system, liquidity of payments within the country and abroad, and the conduct of monetary policy and foreign exchange policy. The Supervision Department at NBRNM serves as the main regulatory body responsible for the supervision of all banking institutions and savings houses.
The main goal of NBRNM’s monetary policy is to maintain price stability. This objective is achieved by an exchange rate targeting strategy, whereby the denar is pegged against the euro as a nominal anchor for the economy. Twice a year, NBRNM prepares monetary and foreign exchange projections and reports, which are publicly available.
The banking system in North Macedonia consists of 12 private banks, one state-owned bank (Development Bank of North Macedonia), and two savings houses. According to the Banking Law, banks observe the principles of profit maximization, liquidity, safety, and profitability. A foreign bank can have a presence either as a legal entity or by opening a branch or a representative office. In 2022, foreign capital was present in 12 banks and was dominant in 9 banks, controlling 71.5 percent of total banking sector assets, 81.5 percent of total loans, and 68.9 percent of total deposits. The operations of non-bank financial institutions are regulated by the provisions of the previous Banking Law and appropriate sub-laws.
The three largest banks, Komercijalna Banka, NBG Stopanska Banka Skopje, and NLB Bank, hold 56.5 percent of total assets, 51.6 percent of total loans, and collect 54.4 percent of total deposits. The five smallest banks, which have individual market shares of less than two percent, account for 6.2 percent of total banking sector assets.
Despite the energy crisis and supply chains disruptions caused by the wear in Ukraine the banking sector in 2022 remained healthy and resilient to risks. It built on its stability by increasing activities and profits. The NBRM implemented systemic measures and macroprudential instruments for strengthening the banking sector’s resilience and the maintaining financial stability.
In 2022, total deposits increased by 5.4 percent, thus slowing down compared to the 8.8 percent growth in 2021. Household deposits grew by 6.3 percent, while enterprise deposits increased by 3.1 percent. Total loans to enterprises and households grew by 10.1 percent on an annual basis, mostly due to a 11.8 percent increase in loans to enterprises, while loans to households increased by 7.7 percent. Banks’ liquid assets in 2022 were 30 percent of total assets, 2.4 percentage points compared to the previous year. The structure of liquid assets remained the same, as banks tend to keep most of their liquidity safe by purchasing treasury bills and bonds, central bank bills, or keeping accounts abroad. The capital adequacy ratio of the banking sector went up 0.4 percentage points to 17.7 percent at the end of 2022, the highest in the last ten years, with all banks maintaining a ratio above the required minimum. The overall non-performing loan (NPL) ratio was 2.9 percent, dropping 0.3 percentage points to its historic low. The NPL ratios of the household and corporate sectors were 1.9 percent and 3.9 percent, respectively.
In 2022 NBRNM conducted different stress-tests on banking sector sensitivity to increased credit risk, liquidity shocks, foreign exchange shocks, and insolvency shocks, all of which showed that the banking sector is healthy and resilient to such shocks, with its capital adequacy ratio remaining above the legally required minimum of eight percent.
Banking supervision is in full compliance with international recommendations, and it is currently implementing provisions of BASEL 3 standards.
In 2022, total assets of North Macedonia’s banking sector reached $12 billion, 7.1 percent more compared to 2021. The banking sector’s overall profitability reached $169.7 million, which was 5.7 percent higher compared to 2021. Profitability indicators in 2022 slightly deteriorated over the previous year. ROE (return on equity) dropped 0.7 percentage points to 12.2 percent, while ROA (return on assets) remained unchanged at 1.5 percent. At the end of 2022, the banking sector employed 5,830 people, 75 more than in 2021.
Although considerably improved over the past several years, North Macedonia’s financial system is still developing to reach Western standards. Banking is very conservative, offering traditional banking services only. Credit is available to private companies but is still subject to significant collateral in the form of real estate, which often is appraised by the banks at lower than market value, and presents an impediment for start-ups, micro-, small-, and medium-sized companies in their access to financing. Overall customer service does not meet Western standards. However, the use of credit cards is widespread, and most companies and shops accept credit cards as a payment instrument.
After reaching the historic low of 1.25 percent in 2021, the reference rate (interest rate on 28-day central bank bills) was gradually increased, reaching 6.3 percent in September 2023. The weighted average lending rate of the banking system at the end of 2022 increased to 4.4 percent, while the weighted average deposit rate increased to 0.9 percent.
For more detailed information about various aspects of the banking system and its performance, NBRNM publishes annual and quarterly reports on banking supervision as well as other data and information on its website. The Department of State’s Investment Climate Statements also has useful additional information.
Foreign Exchange Controls
North Macedonia does not restrict reinvestment or repatriation of profits and investment capital. Foreign investors are entitled to transfer profits and income without a transfer tax. Investment returns are generally remitted within three working days. There are also no legal limitations on private financial transfers, foreign exchange transactions, and capital movements. Local companies can pay for imported goods or services in foreign currencies, as they are allowed to hold a foreign exchange account in one or more banks.
U.S. Banks and Local Correspondent Banks
There are no U.S. banks present in North Macedonia.
Major Banks in North Macedonia
Komercijalna Banka AD
Orce Nikolov 3
P. O. Box 563
1000 Skopje, Republic of North Macedonia
Tel: 389-2-316-8168
Fax: 389-2-322-0975
NBG Stopanska Banka AD Skopje
11 Oktomvri 7
1000 Skopje, Republic of North Macedonia
Tel: 389-2-329-5295
Fax: 389-2-311-4503
NLB Bank
Mother Teresa 1
1000 Skopje, Republic of North Macedonia
Tel: 389-2-15-600
Fax: 389-2-310-5681
Sparkasse Bank
Orce Nikolov 54
1000 Skopje, Republic of North Macedonia
Tel: 389-2-320-0501
Fax: 389-2-320-0515
Halkbank
Mito Hadzivasilev Jasmin bb
1000 Skopje, Republic of North Macedonia
Tel: 389-2-324-0800
Fax: 389-2-329-6330
ProCredit Bank
Manapo bb
1000 Skopje, Republic of North Macedonia
Tel: 389-2-324-6000
Fax: 389-2-321-9901
Development Bank of North Macedonia
Dimitrie Cupovski 26
1000 Skopje, Republic of North Macedonia
Tel: 389-2-311-5844
Fax: 389-2-323-9688
To access North Macedonia ICS section on financing, visit the U.S. Department of State Investment Climate Statement website.