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Title: Determinant of Non Performing Loans: The Case Of Ethiopian Commercial Banks
???metadata.dc.contributor.*???: Abebaw Kassie (PhD)
Belayneh, Zeleke
Keywords: Commercial Banks;Determinant of NPLs;Non Performing Loans
Issue Date: Jan-2017
Publisher: A.A.U
Abstract: Banks role in the economy of any country is very significant. Lending is risky in that repayment of the principal loan plus interest is not always guaranteed. High levels of Non-performing Loans is as a result of failure to manage loans, this would likely affect the performance of Banks and the country’s economy at large. In reference to CBEs reports from 2002-2015 there was a decrease in NPLs between the studied period. Though there has been some decline in NPLs, the figures still remain high. The study seeks to fill the existing research gap by conducting a study to model non-performing loans in Ethiopian commercial banks. It aimed to model non-performing loans in Ethiopia from the empirical evidences that help answer the research objective. Secondary data from National bank of Ethiopia for 14 years period was used and the secondary data was supported by Interviews of banks credit relation managers. The data that was collected in the study was quantitative. Regression analysis was used to analyze the data and find out whether there exists a relationship between bank specific factors and macro-economic factors in Ethiopia. In this research a classical linear regression econometric model was used to link and assess the joint relationship between Nonperforming loan ratio and its determinants in Ethiopian banking industry. The study found out that there was a negative relationship between gross domestic product, inflation rate, exchange rate credit growth, bank size , earning ability of the bank and non-performing loan of commercial banks of Ethiopia. The relationship between Interest rate and liquidity with non-performing loans were found to be positive.
Description: A Thesis Submitted to the Department of Accounting and Finance Presented In the Partial Fulfillment of the Requirement for Degree of Masters of Science in Accounting and Finance
Appears in Collections:Thesis - Accounting & Finance

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