 Determinants of non-performing loans in Ghana banking industryFranklin Amuakwa-Mensah and Angela Boakye-Adjei International Journal of Computational Economics and Econometrics, 2015, vol. 5, issue 1, 35-54 Abstract: The detrimental effect non-performing loans (NPLs) have on banks' income and the economy makes it necessary to examine the determinants of NPLs in the banking industry in Ghana. Using panel regression model, it was found that both bank-specific variables (i.e., previous year's NPL, bank size, net interest margin (NIM), and current year's loan growth) and macroeconomic variables (i.e., previous year's inflation, real gross domestic product (GDP) per capita growth and real effective exchange rate) significantly affect NPLs in the banking industry. Also the sub-sample estimations showed that both bank-specific (i.e., previous year's NPLs and current year's loan growth) and macroeconomic factors (i.e., real effective exchange rate, real GDP per capita growth, and previous year's inflation rate) affect NPLs of large banks. However, whereas bank-specific variables (i.e., previous year's NPLs and current year's loan growth) are important in explaining NPLs, macroeconomic factors are not important in explaining NPLs for small banks. Keywords: NPLs; non-performing loans; panel model; Hausman test; banking industry; Ghana; bank income. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ids:ijcome:v:5:y:2015:i:1:p:35-54 Access Statistics for this article More articles in International Journal of Computational Economics and Econometrics from Inderscience Enterprises Ltd |
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