MACROECONOMIC DETERMINANTS OF NON-PERFORMING LOANS (NPL): EVIDENCE FROM PAKISTAN

Altaf Hussain, Ambar Khalil () and Maryam Nawaz ()
Additional contact information
Ambar Khalil: Department of Economics, The Islamia University of Bahawalpur, Pakistan.
Maryam Nawaz: National College of Business Administration & Economics, Lahore, Multan Campus

Pakistan Journal of Humanities and Social Sciences, 2013, vol. 1, issue 2, 59-72

Abstract: This analytical study investigates the determinants of non-performing loan in Pakistan. Secondary data is used in this study. The data is collected through World Bank Databank, international financial statistics and various issues of economic survey of Pakistan. The issue of Non-Performing Loan is one of the clusters of financial problems in Pakistan. No one can deny the importance of financial sector in any economy. In this study we find the macroeconomic factor that surge the NPL. We also suggest some strategies to cutback the non-performing loans. Current study uses the time series data of Pakistan, ranging from 1990 to 2013. Ordinary least square (OLS) method is used to investigate the problem. The dependent variable is non-performing loan and independent variables are exchange rate, interest rate, GDP, share prices, energy crisis, exchange rate and energy crisis. GDP has significant relationship with NPL and interest rate, share prices have insignificant relationships with NPL. A positive link has established between non-performing loans and various independent variables like energy crisis, exchange rate, interest rate, share prices. But on the other hand a negative relationship has been found between dependent variable and GDP.

Keywords: Macroeconomics; Financial Economics; Multiple Regression. (search for similar items in EconPapers)
JEL-codes: B22 B26 C24 E58 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://journals.internationalrasd.org/index.php/pjhss/article/view/7/128 (application/pdf)
https://journals.internationalrasd.org/index.php/pjhss/article/view/7 (text/html)

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:ani:ipjhss:v:1:y:2013:i:2:p:59-72

Access Statistics for this article

More articles in Pakistan Journal of Humanities and Social Sciences from International Research Alliance for Sustainable Development (iRASD)
Bibliographic data for series maintained by Dr. Umair Ahmed ().