Impact of Macro Factors on NPLs in the Banking Industry of Kazakhstan

Almas Kalimoldayev (), Yelena Popova (), Olegs Cernisevs () and Sergejs Popovs
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Almas Kalimoldayev: Higher School of Economics and Business, Al-Farabi Kazakh National University, Almaty 050051, Kazakhstan
Yelena Popova: Transport and Telecommunication Institute, Faculty of Management and Logistics, LV-1019 Riga, Latvia
Olegs Cernisevs: SIA StarBridge, LV-1050 Riga, Latvia
Sergejs Popovs: Institute of Life Sciences and Technologies, Daugavpils University, LV-5401 Daugavpils, Latvia

JRFM, 2025, vol. 18, issue 8, 1-21

Abstract: The importance of non-performing loans (NPLs) for the stability of financial sectors is difficult to overestimate. The NPL level depends on numerous factors; this study’s goal is to determine the impact of macroeconomic factors on NPLs with the mediation effect of foreign, saving and social factors in Kazakhstan’s banking sector. To determine the affecting factors, the authors performed a systematic literature review. To determine the dependencies between constructs, the Partial Least Squares Structural Equation Modeling (PLS-SEM) method was used. Macroeconomic factors’ direct effect on non-performing loans (NPLs) was examined; a significant negative dependence was determined. The mediation effect of foreign, saving, and social factors was investigated. Foreign factors have a mediation effect, strengthening the dependence between macro factors and NPLs. Nevertheless, they do not have a mediating effect; moreover, they balance and make the effect of macro factors on NPLs statistically insignificant. These findings allow policy-makers to stabilize the situation on NPLs in the financial markets of developing countries like Kazakhstan by directly influencing not only the financial sector but also other sectors of the national economy.

Keywords: non-performing loans; NPLs; PLS-SEM; effect of macro factors; mediation effect of foreign; social; saving factors (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
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