Browsing by Author "Yosef Fekadu"

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    Determinants of Non- performing Loans: Evidence from Commercial Banks in Ethiopia
    (Addis Ababa University, 2018-02) Yosef Fekadu; Abebaw Kassie
    The study adopted a quantitative research approach and used data collected from the National Bank of Ethiopia, Central Statistical Agency and financial statement of nine commercial banks from 2006-2017. Descriptive and random effect multiple regression analysis are employed to analyze the unbalanced panel data. Findings of the study show that return on equity and capital adequacy have negative and significant impact on NPLs. Whereas, loan loss provision and loan to deposit have positive significant relationship with NPLs. The study also showed that GDP, NIM and UM are statistically insignificant factors of NPLs. The finding of this study is important since once identifying the determinants of NPLs might enable management body to make appropriate lending policies that prevent the occurrence of NPLs. The study recommended bank managers to better emphasize on the management of current assets specially loans. Furthermore, it is preferable for commercial banks to concentrate or diversify their credit portfolio by calculating risk relative to its return in order to increase return on equity and to reduce the level of nonperforming loans.