Determinants of Nonperforming Loans in Emerging Markets: Evidence from the MENA Region

Imad Jabbouri () and Maryem Naili
Additional contact information
Imad Jabbouri: School of Business Administration, Al Akhawayn University in Ifrane, Hassan II Avenue, 53000 Ifrane, Morocco
Maryem Naili: School of Business Administration, Al Akhawayn University in Ifrane, Hassan II Avenue, 53000 Ifrane, Morocco2The Higher Institute of Commerce and Business Administration (Groupe ISCAE), Km 9, 5 Route de Nouasseur, Bp. 8114, Casablanca, Morocco

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2019, vol. 22, issue 04, 1-33

Abstract: Credit risk has severe impacts on banks’ performance, leading to financial and economic distress. To highlight this interesting issue, this study explores bank-specific and macroeconomic determinants of banks’ credit risk, denoted by the level of nonperforming loans (NPLs). The study includes 98 banks from 10 Middle East and North African (MENA) emerging countries spanning the period between 2003 and 2016. The analysis employs panel data estimation technique. Our results reveal that bank size, capital adequacy ratio, bank operating efficiency, profitability, GDP growth, unemployment, inflation, and public debt represent the main determinants of NPLs in MENA emerging markets. The results of this research have practical implications for bank managers, regulators, investors, and financial analysts. This study provides significant insights on the determinants of NPLs, which will allow bank managers to design credit policies that minimize borrowers’ defaults. The findings of the study are useful to policy makers to establish new and reinforce existing regulations to maintain the steadiness of the banking sector in MENA emerging countries.

Keywords: Bank risk management; nonperforming loans; credit risk; emerging markets (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S0219091519500267
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsi:rpbfmp:v:22:y:2019:i:04:n:s0219091519500267

Ordering information: This journal article can be ordered from

DOI: 10.1142/S0219091519500267

Access Statistics for this article

Review of Pacific Basin Financial Markets and Policies (RPBFMP) is currently edited by Cheng-few Lee

More articles in Review of Pacific Basin Financial Markets and Policies (RPBFMP) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().